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Carroll Quigley on Wall Street and the Left
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From "Tragedy and Hope", Chapter 17, American Confusions, 1945-50, pp. 937-956, First published 1966
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The significant influence of “Wall Street” (meaning Morgan) both in the Ivy League and in Washington, in the period of sixty or more years following 1880, explains the constant interchange between the Ivy League and the Federal government, an interchange which undoubtedly aroused a good deal of resentment in less-favored circles, who were more than satiated with the accents, tweeds, and High Episcopal Anglophilia of these peoples. Poor Dean Acheson, in spite of (or perhaps because of) his remarkable qualities of intellect and character, took the full brunt of this resentment from McCarthy and his allies in 1948-1954. The same feeling did no good to pseudo-Ivy League figures like Alger Hiss.
Because of its dominant position in Wall Street, the Morgan firm came also to dominate other Wall Street powers, such as Carnegie, Whitney, Vanderbilt, Brown-Harriman, or Dillon-Reed. Close alliances were made with Rockefeller, Mellon, and Duke interests hut not nearly so intimate ones with the great industrial powers like du Pont and Ford. In spite of the great influence of this “Wall Street” alignment, an influence great enough to merit the name of the “American Establishment,” this group could not control the Federal government and, in consequence, had to adjust to a good many government actions thoroughly distasteful to the group. The chief of these were in taxation law, beginning with the graduated income tax in 1913, but culminating, above all else, in the inheritance tax. These tax laws drove the great private fortunes dominated by Wall Street into tax-exempt foundations, which became a major link in the Establishment network between Wall Street, the Ivy League, and the Federal government. Dean Rusk, Secretary of State after 1961, formerly president of the Rockefeller Foundation and Rhodes Scholar at Oxford (1931–1933), is as much a member of this nexus as Alger Hiss, the Dulles brothers, Jerome Greene, James T. Shotwell, John W. Davis, Elihu Root, or Philip Jessup.
More than fifty years ago the Morgan firm decided to infiltrate the Left-wing political movements in the United States. This was relatively easy to do, since these groups were starved for funds and eager for a voice to reach the people. Wall Street supplied both. The purpose was not to destroy, dominate, or take over but was really threefold: (1) to keep informed about the thinking of left-wing or liberal groups; (2) to provide them with a mouthpiece so that they could "blow off steam,” and (3) to have a final veto on their publicity and possibly on their actions, if they ever went “radical.” There was nothing really new about this decision, since other financiers had talked about it and even attempted it earlier. What made it decisively important this time was the combination of its adoption by the dominant Wall Street financier, at a time when tax policy was driving all financiers to seek tax-exempt refuges for their fortunes, and at a time when the ultimate in Left-wing radicalism was about to appear under the banner of the Third International.
The best example of this alliance of Wall Street and Left-wing publication was The New Republic, a magazine founded by Willard Straight, using Payne Whitney money, in 1914. Straight, who had been assistant to Sir Robert Hart (Director of the Chinese Imperial Customs Service and the head of the European imperialist penetration of China) and had remained in the Far East from 1901 to 1912, became a Morgan partner and the firm’s chief expert on the Far East. He married Dorothy Payne Whitney whose names indicate the family alliance of two of America’s greatest fortunes. She was the daughter of William C. Whitney, New York utility millionaire and the sister and co-heiress of Oliver Payne, of the Standard Oil “trust.” One of her brothers married Gertrude Vanderbilt, while the other, Payne Whitney, married the daughter of Secretary of State John Hay, who enunciated the American policy of the “Open Door” in China. In the next generation, three first cousins, John Hay (“Jock”) Whitney, Cornelius Vanderbilt (“Sonny”) Whitney, and Michael Whitney (“Mike”) Straight, were allied in numerous public policy enterprises of a propagandist nature, and all three served in varied roles in the late New Deal and Truman administrations. In these they were closely allied with other “Wall Street liberals,” such as Nelson Rockefeller.
The New Republic was founded by Willard and Dorothy Straight, using her money, in 1914, and continued to be supported by her financial contributions until March 23, 1953. The original purpose for establishing the paper was to provide an outlet for the progressive Left and to guide it quietly in an Anglophile direction. This latter task was entrusted to a young man, only four years out of Harvard, but already a member of the mysterious Round Table group, which has played a major role in directing England’s foreign policy since its formal establishment in 1909. This new recruit, Walter Lippmann, has been, from 1914 to the present, the authentic spokesman in American journalism for the Establishments on both sides of the Atlantic in international affairs. His biweekly columns, which appear in hundreds of American papers, are copyrighted by the New York Herald Tribune which is now owned by J. H. Whitney. It was these connections, as a link between Wall Street and the Round Table Group, which gave Lippmann the opportunity in 1918, while still in his twenties, to be the official interpreter of the meaning of Woodrow Wilson’s Fourteen Points to the British government.
Willard Straight, like many Morgan agents, was present at the Paris Peace Conference but died there of pneumonia before it began. Six years later, in 1925, when his widow married a second time and became Lady Elmhirst of Dartington Hall, she took her three small children from America to England, where they were brought up as English. She herself renounced her American citizenship in 1935. Shortly afterward her younger son, “Mike,” unsuccessfully “stood” for Parliament on the Labour Party ticket for the constituency of Cambridge University, an act which required, under the law, that he be a British subject. This proved no obstacle, in 1938, when Mike, age twenty-two, returned to the United States, after thirteen years in England, and was at once appointed to the State Department as Adviser on International Economic Affairs. In 1937, apparently in preparation for her son’s return to America, Lady Elmhirst, sole owner of The New Republic, shifted this ownership to Westrim, Ltd., a dummy corporation created for the purpose in Montreal, Canada, and set up in New York, with a grant of $1.5 million, the William C. Whitney Foundation of which Mike became president. This helped finance the family’s interest in modern art and dramatic theater, including sister Beatrix’s tours as a Shakespearean actress.
Mike Straight served in the Air Force in 1943 – 1945, but this did not in any way hamper his career with The New Republic. He became Washington correspondent in May 1941; editor in June 1943; and publisher in December 1946 (when he made Henry Wallace editor). During these shifts he changed completely the control of The New Republic, and its companion magazine Asia, removing known liberals (such as Robert Morss Lovett, Malcolm Cowley, and George Soule), centralizing the control, and taking it into his own hands. This control by Whitney money had, of course, always existed, but it had been in abeyance for the twenty-five years following Willard Straight’s death.
The first editor of The New Republic, the well-known “liberal” Herbert Croly, was always aware of the situation. After ten years in the job, he explained the relationship in the “official” biography of Willard Straight which he wrote for a payment of $25,000. “Of course they [the Straights) could always withdraw their financial support if they ceased to approve of the policy of the paper; and, in that event, it would go out of existence as a consequence of their disapproval.” Croly’s biography of Straight, published in 1924, makes perfectly clear that Straight was in no sense a liberal or a progressive, but was, indeed, a typical international banker and that The New Republic was simply a medium for advancing certain designs of such international bankers, notably to blunt the isolationism and anti-British sentiments so prevalent among many America progressives, while providing them with a vehicle for expression of their progressive views in literature, art, music, social reform, and even domestic politics. In 1916, when the editorial board wanted to support Wilson for a second term in the Presidency, Willard Straight took two pages of the magazine to express his own support for Hughes. The chief achievement of The New Republic, however, in 1914 – 1918 and again in 1938 – 1948, was for interventionism in Europe and support of Great Britain.
The role of “Mike” Straight in this situation in 1938 – 1948 is clear. He took charge of this family fief, abolished the editorial board, and carried on his father’s aims, in close cooperation with labor and Left-wing groups in American politics. In these efforts he was in close contact with his inherited Wall Street connections, especially his Whitney cousins and certain family agents like Bruce Bliven, Milton C. Rose, and Richard J. Walsh. They handled a variety of enterprises, including publications, corporations, and foundations, which operated out of the law office of Baldwin, Todd, and Lefferts of 120 Broadway, New York City. In this nexus were The New Republic, Asia, Theatre Arts, the Museum of Modern Art, and others, all supported by a handful of foundations, including the William C. Whitney Foundation, the Gertrude Vanderbilt Whitney Foundation, the J. H. Whitney Foundation, and others. An interesting addition was made to these enterprises in 1947 when Straight founded a new magazine, the United Nations World, to be devoted to the support of the UN. Its owners of record were The New Republic itself (under its corporate name), Nelson Rockefeller, J. H. Whitney, Max Ascoli (an anti-Fascist Italian who had married American wealth and used it to support a magazine of his own, The Reporter), and Beatrice S. Dolivet. The last lady, Mike Straight’s sister, made her husband, Louis Dolivet, “International Editor” of the new magazine.
An important element in this nexus was Asia magazine, which had been established by Morgan’s associates as the journal of the American Asiatic Society in 1898, had been closely associated with Willard Straight during his lifetime, and was owned outright by him from January 1917. In the 1930’s it was operated for the Whitneys by Richard J. Walsh and his wife, known to the world as Pearl Buck. Walsh, who acted as editor of Asia, was also president of the holding corporation of The New Republic for several years and president of the John Day publishing company. In 1942, after Nelson Rockefeller and Jock Whitney joined the government to take charge of American propaganda in Latin America in the Office of the Coordinator of Inter-American Affairs, Asia magazine changed its name to Asia and the Americas. In 1947, when Mike Straight began a drive to “sell” the United Nations, it was completely reorganized into United Nations World.
Mike Straight was deeply anti-Communist, but he frequently was found associated with them, sometimes as a collaborator, frequently as an opponent. The opposition was seen most clearly in his efforts as one of the founders of The American Veterans Committee (AVC) and its political sequel, the Americans for Democratic Action (ADA). The collaboration may be seen in Straight’s fundamental role in Henry Wallace’s third-party campaign for the Presidency in 1948.
The relationship between Straight and the Communists in pushing Wallace into his 1948 adventure may be misjudged very easily. The anti-Communist Right had a very simple explanation of it: Wallace and Straight were Communists and hoped to elect Wallace President. Nothing could be further from the truth. All three – Straight, Wallace, and the Communists, joined in the attempt merely as a means of defeating Truman. Straight was the chief force in getting the campaign started in 1947 and was largely instrumental in bringing some of the Communists into it, but when he had them all aboard the Wallace train, he jumped off himself, leaving both Wallace and the Communists gliding swiftly, without guidance or hope, on the downhill track to oblivion. It was a brilliantly done piece of work.
The Communists wanted a third party in 1948 because it seemed the only way to beat Truman and destroy the Marshall Plan. They hated the President for the "Truman Doctrine” and his general opposition to the Soviet Union, but, above all, because he had prevented the postwar economic collapse and the American relapse into isolationism, both of which the Communists had not only expected but critically needed. It was obvious to everyone that a two-party campaign in 1948 would give the vote of the Right to the Republicans and the vote of the Left to the Democrats, with the victory decided by where the division came in the Center. In such a situation neither Straight nor the Communists could influence the outcome in any way. But a third party on the Left, by taking labor and other Left-wing votes from Truman, could reduce the Democratic totals in the major states enough to throw those states and the election to the Republicans. Why Straight wanted to do this in the critical months from September 1946 to April 1948 is unknown, but he clearly changed his mind in the spring of 1948, abandoning poor, naive Henry Wallace to the Communists at that time. A possible explanation of these actions will be given later.
What is clear is that Mike Straight had a great deal to do with Wallace in the autumn of 1946 when the former Vice-President broke with Truman and was fired from the Cabinet. The break came over a Wallace speech, very critical of American policy toward Russia, given before a wildly biased pro-Soviet audience in Madison Square Garden on September 12, 1946. At the time Truman told reporters he had approved the speech before delivery (a version which Wallace still upholds), but, within a few days, Secretary of State Byrnes forced the President to make a choice between him or Wallace, and the latter was dismissed from the Cabinet.
Out of the government, without a platform from which to address the public, Wallace’s political future looked dim in the early autumn of 1946. Straight provided the platform, by giving him his own editorial chair at The New Republic (announced October 12, 1946). For the next fifteen months the Wallace campaign was a Straight campaign. The latter supplied speechwriters, research assistants, editorial writers, office space, money, and The New Republic itself. Technically Wallace was editor, but the magazine staff and expenclitures steadily increased in directions which had little to do with the magazine and everything to do with Wallace’s presidential campaign, although this effort was not announced to the public until a year later, in December 1947.
In the meantime, from the spring of 1947 onward, the Communists came in. It would not be strictly true to say that Straight "brought them in,” but I believe it is fair to say that he “let them in.” For example, one of the first to arrive was Lew Frank, Jr., brought in by Straight, who later insisted that he did not realize that Frank was a Communist. As a matter of fact, there was no evidence that Frank was a member of the Communist Party, but Straight knew exactly where Frank stood politically since they had engaged, on opposite sides, in a bitter struggle between Communists and anti-Communists for control of AVC. In this, Frank had been a member of the Communist caucus within AVC’s national planning committee (as Straight told David A. Shannon in 1956), and followed every twist of the party line in this whole period. This party line became the pattern for Wallace’s formal speeches, since Frank was his most important speechwriter over a period of eighteen months from early 1947 to October 1948. More than this, Frank accompanied Wallace on his endless travels during this period. In the autumn of 1947 these three, Wallace, Frank, and Straight, made a trip to the Mediterranean and were given an audience together by the Pope on November 4, 1947. On his return from this journey, Wallace was a changed man; his mind was made up, to run against Truman on a third-party ticket. The announcement was made public in The New Republic in December.
Straight continued to work for Wallace for President, and The New Republic remained the center of the movement for almost four more months, but something had changed. While he was still working for Wallace as President and allowing the Communists into the project, he was simultaneously doing two other things: working openly, and desperately, to prevent the new third party from campaigning on any level other than the presidential, by blocking everywhere he could Communist efforts to run third-party candidates for state or congressional offices in competition with the Democrats; much less publicly, he worked with his anti-Communist friends in labor, veteran, and liberal groups to prevent endorsement of the Wallace candidacy. As a consequence, the Communists were destroyed and eventually driven out of such organizations, notably from the CIO-PAC (the great political alignment of labor and progressive groups). As David Shannon wrote in The Decline of American Communism (1959), “The Communists’ support of Wallace shattered the ‚left-center’ coalition in the CIO; for the Communist unions, the Wallace movement was the beginning of the end. The coalition began to dissolve almost immediately after Wallace’s announcement.” What this means is that Wallace’s campaign to defeat Truman destroyed completely the remaining vestiges of the Popular Front movement of the 1930’s, drove the Communists out of the unions and all progressive political groups, and drove the Communist unions out of the labor movement of the country. This ended Communism as a significant political force in the United States, and the end was reached by December 1948, long before McCarthy or J. Edgar Hoover or HUAC did their work. The men who achieved this feat were Wallace and Straight, although it is still not completely clear if they recognized what they were doing.
During the winter of 1947-1948, Lew Frank recognized that he was incapable of handling the complex issues raised in Wallace`s many speeches. Accordingly, he joined a “Communist research group” which met in the Manhattan home of the wealthy “Wall Street Red,” Frederick Vanderbilt Field. The chief members of this group, probably all Communists, were Victor Perlo and David Ramsay. This pair drew up for Wallace an attack on the Marshall Plan and an alternative Communist plan for European reconstruction, which was published in The New Republic on January 12, 1948, was presented by Wallace to the Marshall Plan “Hearings” of the House Foreign Affairs Committee on February 24th, but was subsequently repudiated by Straight. In the three months following the Perlo article, Straight was busy sawing off the limb on which Wallace now sat with the Communists. He discharged from The New Republic payroll all those who were working for the campaign rather than for the magazine, and the office on East Forty-ninth Street once again settled down to publishing a “liberal” weekly. In protest at this reversal, his managing editor, Edd Johnson, resigned.
If Mike Straight planned to do what he did do to the Communists in 1946 – 1948, that is, to get them out of progressive movements and unions, he pulled off the most skillful political coup in twentieth century American politics. (Italics SvZ) It is not clear that he did plan it or intend it. But as a very able and informed man, he must have had some motivation when he began, in 1947, the effort which he knew might defeat Truman in 1948. While the evidence is not conclusive, there are hints that another, more personal, motive might have been involved, at least partly, in building up the Wallace threat to Truman’s political future. It concerns the Whitney family interest in overseas airlines.
The Whitney family were deeply involved in airlines. Sonny Whitney was a founder of Pan-American Airlines and chairman of its board of directors from its establishment in 1928 until he went to military service in 1941. Mike’s brother, Air Commodore Whitney Willard Straight, C.B.E., was even more deeply involved on the British side. Big brother Whitney (born in 1912) had been in civil aviation in England from the age of twenty-two, and by 1946-1949, was not only a director of the Midland Bank, one of the world’s greatest financial institutions, but was also a director of Rolls-Royce and of BOAC, as well as chairman of the board of directors of BEA (British European Airways). In the years following the end of the war, a violent struggle was going on, within aviation circles and the United States government, over the future of American transocean air services. Before the war, these had been a monopoly of Pan-Am; now, at the end of the war, the struggle was over how the CAB would divide up this monopoly and what disposition would be made of the enormous air-force investment in overseas bases. Apparently the White House was not cooperative in these matters at first, but late in 1947 C. V. Whitney was made, by presidential interim appointment, Assistant Secretary of the new Department of the Air Force and, eighteen months later, after Truman’s inauguration, was made Assistant Secretary of Commerce for Aeronautics. This was the most important post concerned with civil aviation in any Federal department. The connection, if any, between these appointments and Mike Straight’s original support and later abandonment of Wallace has never been revealed.
The associations between Wall Street and the Left, of which Mike Straight is a fair example, are really survivals of the associations between the Morgan Bank and the Left. To Morgan all political parties were simply organizations to be used, and the firm always was careful to keep a foot in all camps. Morgan himself, Dwight Morrow, and other partners were allied with Republicans; Russell C. Leffingwell was allied with the Democrats; Grayson Murphy was allied with the extreme Right; and Thomas W. Lamont was allied with the Left. Like the Morgan interest in libraries, museums, and art, its inability to distinguish between loyalty to the United States and loyalty to England, its recognition of the need for social work among the poor, the multipartisan political views of the Morgan firm in domestic politics went back to the original founder of the firm, George Peabody (1795–1869). To this same seminal figure may be attributed the use of tax-exempt foundations for controlling these activities, as may be observed in many parts of America to this day, in the use of Peabody foundations to support Peabody libraries and museums. Unfortunately, we do not have space here for this great and untold story, but it must be remembered that what we do say is part of a much larger picture.
Our concern at the moment is with the links between Wall Street and the Left, especially the Communists. Here the chief link was the Thomas W. Lamont family. This family was in many ways parallel to the Straight family. Tom Lamont had been brought into the Morgan firm, as Straight was several years later, by Henry P. Davison, a Morgan partner from 1909. Lamont became a partner in 1910, as Straight did in 1913. Each had a wife who became a patroness of Leftish causes, and two sons, of which the elder was a conventional banker, and the younger was a Left-wing sympathizer and sponsor. In fact, all the evidence would indicate that Tom Lamont was simply Morgan’s apostle to the Left in succession to Straight, a change made necessary by the latter’s premature death in 1918. Both were financial supporters of liberal publications, in Lamont`s case The Saturday Review of Literature, which he supported throughout the 1920`s and 1930`s, and the New York Post, which he owned from 1918 to 1924.
The chief evidence, however, can be found in the files of the HUAC which show Tom Lamont, his wife Flora, and his son Corliss as sponsors and financial angels to almost a score of extreme Left organizations, including the Communist Party itself. Among these we need mention only two. One of these was a Communist-front organization, the Trade Union Services, Incorporated, of New York City, which in 1947 published fifteen trade-union papers for various CIO unions. Among its officers were Corliss Lamont and Frederick Vanderbilt Field (another link between Wall Street and the Communists). The latter was on the editorial boards of the official Communist newspaper in New York, the Daily Worker, as well as its magazine, The New Masses, and was the chief link between the Communists and the Institute of Pacific Relations in 1928–1947. Corliss Lamont was the leading light in another Communist organization, which started life in the 1920’s as the Friends of the Soviet Union, but in 1943 was reorganized, with Lamont as chairman of the board and chief incorporator, as the National Council of American-Soviet Friendship.
During this whole period of over two decades, Corliss Lamont, with the full support of his parents, was one of the chief figures in “fellow traveler” circles and one of the chief spokesmen for the Soviet point of view both in these organizations and also in connections which came to him either as son of the most influential man in Wall Street or as professor of philosophy at Columbia University. His relationship with his parents may be reflected in a few events of this period.
In January 1946, Corliss Lamont was called before HUAC to give testimony on the National Council of American-Soviet Friendship. He refused to produce records, was subpoenaed, refused, was charged with contempt of Congress, and was so cited by the House of Representatives on June 26, 1946. In the midst of this controversy, in May, Corliss Lamont and his mother, Mrs. Thomas Lamont, presented their valuable collection of the works of Spinoza to Columbia University. The adverse publicity continued, yet when Thomas Lamont rewrote his will, on January 6, 1948, Corliss Lamont remained in it as co-heir to his father’s fortune of scores of millions of dollars.
In 1951 the Subcommittee on Internal Security of the Senate Judiciary Committee, the so-called McCarran Committee, sought to show that China had been lost to the Communists by the deliberate actions of a group of academic experts on the Far East and Communist fellow travelers whose work in that direction was controlled and coordinated by the Institute of Pacific Relations (IPR). The influence of the Communists in IPR is well established, but the patronage of Wall Street is less well known.
The IPR was a private association of ten independent national councils in ten countries concerned with affairs in the Pacific. The headquarters of the IPR and of the American Council of IPR were both in New York and were closely associated on an interlocking basis. Each spent about $2.5 million dollars over the quarter-century from 1925 to 1950, of which about half, in each case, came from the Carnegie Foundation and the Rockefeller Foundation (which were themselves interlocking groups controlled by an alliance of Morgan and Rockefeller interests in Wall Street). Much of the rest, especially of the American Council, came from firms closely allied to these two Wall Street interests, such as Standard Oil, International Telephone and Telegraph, International General Electric, the National City Bank, and the Chase National Bank. In each case, about 10 percent of income came from sales of publications and, of course, a certain amount came from ordinary members who paid $15 a year and received the periodicals of the IPR and its American Council, Pacific Affairs and Far Eastern Survey.
The financial deficits which occurred each year were picked up by financial angels, almost all with close Wall Street connections. The chief identifiable contributions here were about $60,000 from Frederick Vanderbilt Field over eighteen years, $14,700 from Thomas Lamont over fourteen years, $800 from Corliss Lamont (only after 1947), and $18,000 from a member of Lee, Higginson in Boston who seems to have been Jerome D. Greene. In addition, large sums of money each year were directed to private individuals for research and travel expenses from similar sources, chiefly the great financial foundations.
Most of these awards for work in the Far Eastern area required approval or recommendation from members of IPR. Moreover, access to publication and recommendations to academic positions in the handful of great American universities concerned with the Far East required similar sponsorship. And, finally, there can be little doubt that consultant jobs on Far Eastern matters in the State Department or other government agencies were largely restricted to IPR-approved people. The individuals who published, who had money, found jobs, were consulted, and who were appointed intermittently to government missions were those who were tolerant of the IPR line. The fact that all these lines of communication passed through the Ivy League universities or their scattered equivalents west of the Appalachians, such as Chicago, Stanford, or California, unquestionably went back to Morgan’s influence in handling large academic endowments.
There can be little doubt that the more active academic members of IPR, the professors and publicists who became members of its governing board (such as Owen Lattimore, Joseph P. Chamberlain, and Philip C. Jessup of Columbia, William W. Lockwood of Princeton, John K. Fairbank of Harvard, and others) and the administrative staff (which became, in time, the most significant influence in its policies) developed an IPR party line. It is, furthermore, fairly clear that this IPR line had many points in common both with the Kremlin’s party line on the Far East and with the State Department’s policy line in the same area. The interrelations among these, or the influence of one on another, is highly disputed. Certainly no final conclusions can be drawn. Clearly there where some Communists, even party members, involved (such as Frederick
Vanderbilt Field), but it is much less clear that there was any disloyalty to the United States. Furthermore, there was a great deal of intrigue both to help those who agreed with the IPR line and to influence United States government policy in this direction, but there is no evidence of which I am aware of any explicit plot or conspiracy to direct American policy in a direction favorable either to the Soviet Union or to international Communism. Efforts of the radical Right to support their convictions about these last points undoubtedly did great, lasting, and unfair damage to the reputations and interests of many people.
The true explanation of what happened is not yet completely known and, as far as it is known, is too complicated to elucidate here. It is, however, clear that many persons who were born in the period 1900-1920 and came to maturity in the period 1928–1940 were so influenced by their experiences of war, depression, and insecurity that they adopted, more or less unconsciously, certain aspects of the Communist ideology (such as the economic interpretation of history, the role of a dualistic class struggle in human events, or the exploitative interpretation of the role of capital in the productive system and of the possessing groups in any society). Many of these ideas were nonsense, even in terms of their own experiences, but they were facile interpretative guides for people who, whatever their expert knowledge of their special areas, were lacking in total perspective on society as a whole or human experience as a whole. Moreover, many of these people felt an unconscious obligation to “help the underdog.” This favorable attitude toward the downtrodden and the oppressed was rooted in our Western Christian heritage, especially in nineteenth-century humanitarianism, and in the older Christian idea that all persons are redeemable and will prove trustworthy if they are but trusted. This outlook was, for example, prevalent in that ubiquitous intriguer, Lionel Curtis, who was the original guide and parent of the IPR and of many similar organizations. As children of missionaries, many of the organizers and members of the IPR obtained this spirit from their family background along with their knowledge of the Far Eastern languages which made them “experts.”
It must be confessed that the IPR had many of the marks of a fellow-traveler or Communist “captive” organization. But this does not, in any way, mean that the radical Right or the professional ex-Communist version of these events is accurate. For example, Elizabeth Bentley and, above all, Louis Budenz testified before the McCarran Committee on the IPR. The latter identified almost every person associated with the organization as a Communist or “under Communist discipline” by his personal knowledge. In the most famous case, that of Owen Lattimore, Budenz’s emphatic testimony that Lattimore was a Communist and that his orders were issued by small Communist Party conclaves of Earl Browder, Budenz, F. V. Field, and others was tocally refuted, not only by the direct contradictory testimony of Browder and Field, but by subsequent evidence from more reliable witnesses and from Budenz himself. Questioning eventually made it clear that Budenz did not know Lattimore or, his work or any of his books (including one which he quoted as proof of Lattimore’s adherence to the party line). Moreover, Budenz gave direct testimony that the 1944 mission to China of Vice-President Henry Wallace, accompanied by Lattimore and John Carter Vincent (a State Department expert on the Far East who has been accused of Communism), drew up recommendations which were pro-Communist. This was shown to be the exact contrary of the truth and a mere figment of Budenz’s active imagination. Budenz testified that the replacement of General Stilwell (who was anti-Chiang and relatively favorable to Mao), by General Wedemeyer was the consequence of the influence of Lattimore and Vincent on Wallace. Joseph Alsop, who was present at all the discussions in question and drafted the recommendations, later testified that he himself was the author of all the “pro-Communist” passages which Budenz attributed to Lattimore and that he himself had suggested the relatively pro-Chiang General Wedemeyer as Stilwell’s successor in order to block Wallace’s suggestion of General Chennault for the position.
The radical Right version of these events as written up by John T. Flynn, Freda Utley, and others, was even more remote from the truth than were Budenz’s or Bentley’s versions, although it had a tremendous impact on American opinion and American relations with other countries in the years 1947–1955. This radical Right fairy tale, which is now an accepted folk myth in many groups in America, pictured the recent history of the United States, in regard to domestic reform and in foreign affairs, as a well-organized plot by extreme Left-wing elements, operating from the White House itself and controlling all the chief avenues of publicity in the United States, to destroy the American way of life, based on private enterprise, laissez faire, and isolationism, in behalf of alien ideologies of Russian Socialism and British cosmopolitanism (or internationalism). This plot, if we are to believe the myth, worked through such avenues of publicity as The New York Times and the Herald Tribune, the Christian Science Monitor and the Washington Post, the Atlantic Monthly and Harper’s Magazine and had at its core the wild-eyed and bushy-haired theoreticians of Socialist Harvard and the London School of Economics. It was determined to bring the United States into World War II on the side of England (Roosevelt’s first love) and Soviet Russia (his second love) in order to destroy every finer element of American life and, as part of this consciously planned scheme, invited Japan to attack Pearl Harbor, and destroyed Chiang Kai-shek, all the while undermining America’s real strength by excessive spending and unbalanced budgets.
This myth, like all fables, does in fact have a modicum of truth. There does exist, and has existed for a generation, an international Anglophile network which operates, to some extent, in the way the radical Right believes the Communists act. In fact, this network, which we may identify as the Round Table Groups, has no aversion to cooperating with the Communists, or any other groups, and frequently does so. I know of the operations of this network because I have studied it for twenty years and was permitted for two years, in the early 1960’s, to examine its papers and secret records. I have no aversion to it or to most of its aims and have, for much of my life, been close to it and to many of its instruments. I have objected, both in the past and recently, to a few of its policies (notably to its belief that England was an Atlantic rather than a European Power and must be allied, or even federated, with the United States and must remain isolated from Europe), but in general my chief difference of opinion is that it wishes to remain unknown, and I believe its role in history is significant enough to be known.
The Round Table Groups have already been mentioned in this book several times, notably in connection with the formation of the British Commonwealth in chapter 4 and in the discussion of appeasement in chapter 12 (“the Cliveden Set”). At the risk of some repetition, the story will be summarized here, because the American branch of this organization (sometimes called the “Eastern Establishment”) has played a very significant role in the history of the United States in the last generation.
The Round Table Groups were semi-secret discussion and lobbying groups organized by Lionel Curtis, Philip H. Kerr (Lord Lothian), and (Sir) William S. Marris in 1908-1911. This was done on hehalf of Lord Milner, the dominant Trustee of the Rhodes thrust in the two decades 1905-1925. The original purpose of these groups was to seek to federate the English-speaking world along lines laid down by Cecil Rhodes (1853–1902) and William T. Stead (1849–1912), and the money for the organizational work came originally from the Rhodes Trust. By 1915 Round Table groups existed in seven countries, including England, South Africa, Canada, Australia, New Zealand, India, and a rather loosely organized group in the United States (George Louis Beer, Walter Lippmann, Frank Aydelotte, Whitney Shepardson, Thomas W. Lamont, Jerome D. Greene, Erwin D. Canham of the Christian Science Monitor, and others). The attitudes of the various groups were coordinated by frequent visits and discussions and by a well-informed and totally anonymous quarterly magazine, The Round Table, whose first issue, largely written by Philip Kerr, appeared in November 1910.
The leaders of this group were: Milner, until his death in 1925, followed by Curtis (1872–1955), Robert H. (Lord) Brand (brother-in-law of Lady Astor) until his death in 1963, and now Adam D. Marris, son of Sir William and Brand’s successor as managing director of Lazard Brothers bank. The original intention had been to have collegial leadership, but Milner was too secretive and headstrong to share the role. He did so only in the period 1913-1919 when he held regular meetings with some of his closest friends to coordinate their activities as a pressure group in the struggle with Wilhelmine Germany. This they called their “Ginger Group.” After Milner’s death in 1925, the leadership was largely shared by the survivors of Milner’s “Kindergarten,” that is, the group of young Oxford men whom he used as civil servants in his reconstruction of South Africa in 1901-1910. Brand was the last survivor of the “Kindergarten”; since his death, the greatly reduced activities of the organization have been exercised largely through the Editorial Committee of The Round Table magazine under Adam Marris.
Money for the widely ramified activities of this organization came originally from the associates and followers of Cecil Rhodes, chiefly from the Rhodes Trust itself, and from wealthy associates such as the Beit brothers, from Sir Abe Bailey, and (after 1915) from the Astor family. Since 1925 there have been substantial contributions from wealthy individuals and from foundations and firms associated with the international banking fraternity, especially the Carnegie United Kingdom Trust, and other organizations associated with J. P. Morgan, the Rockefeller and Whitney families, and the associates of Lazard Brothers and of Morgan, Grenfell, and Company.
The chief backbone of this organization grew up along the already existing financial cooperation running from the Morgan Bank in New York to a group of international financiers in London led by Lazard Brothers. Milner himself in 1901 had refused a fabulous offer, worth up to $100,000 a year, to become one of the three partners of the Morgan Bank in London, in succession to the younger J. P. Morgan who moved from London to join his father in New York (eventually the vacancy went to E. C. Grenfell, so that the London affiliate of Morgan became known as Morgan, Grenfell, and Company). Instead, Milner became director of a number of public banks, chiefly the London Joint Stock Bank, corporate precursor of the Midland Bank. He became one of the greatest political and financial powers in England, with his disciples strategically placed throughout England in significant places, such as the editorship of The Times, the editorship of The Observer, the managing directorship of Lazard Brothers, various administrative posts, and even Cabinet positions. Ramifications were established in politics, high finance, Oxford and London universities, periodicals, the civil service, and tax-exempt foundations.
At the end of the war of 1914, it became clear that the organization of this system had to be greatly extended. Once again the task was entrusted to Lionel Curtis who established, in England and each dominion, a front organization to the existing local Round Table Group. This front organization, called the Royal Institute of International Affairs, had as its nucleus in each area the existing submerged Round Table Group. In New York it was known as the Council on Foreign Relations, and was a front for J. P. Morgan and Company in association with the very small American Round Table Group. The American organizers were dominated by the large number of Morgan “experts,” including Lamont and Beer, who had gone to the Paris Peace Conference and there became close friends with the similar group of English “experts” which had been recruited by the Milner group. In fact, the original plans for the Royal Institute of International Affairs and the Council on Foreign Relations were drawn up at Paris. The Council of the RIIA (which, by Curtis’s energy came to he housed in Chatham House, across St. James’s Square from the Astors, and was soon known by the name of this headquarters) and the board of the Council on Foreign Relations have carried ever since the marks of their origin. Until 1960 the council at Chatham House was dominated by the dwindling group of Milner’s associates, while the paid staff members were largely the agents of Lionel Curtis. The Round Table for years (until 1961) was edited from the back door of Chatham House grounds in Ormond Yard, and its telephone came through the Chatham House switchboard.
The New York branch was dominated by the associates of the Morgan Bank. For example, in 1928 the Council on Foreign Relations had John W. Davis as president, Paul Cravath as vice-president, and a council of thirteen others, which included Owen D. Young, Russell C. Leffingwell, Norman Davis, Allen Dulles, George W. Wickersham, Frank L. Polk, Whitney Shepardson, Isaiah Bowman, Stephen P. Duggan, and Otto Kahn. Throughout its history the council has been associated with the American Round Tablers, such as Beer, Lippmann, Shepardson, and Jerome Greene.
The academic figures have been those linked to Morgan, such as James T. Shotwell, Charles Seymour, Joseph P. Chamberlain, Philip Jessup, Isaiah Bowman and, more recently, Philip Moseley, Grayson L. Kirk, and Henry M. Wriston. The Wall Street contacts with these were created originally from Morgan’s influence in handling large academic endowments. In the case of the largest of these endowments, that at Harvard, the influence was usually exercised indirectly through “State Street,” Boston, which, for much of the twentieth century, came through the Boston banker Thomas Nelson Perkins.
Closely allied with this Morgan influence were a small group of Wall Street law firms, whose chief figures were Elihu Root, John W. Davis, Paul D. Cravath, Russell Leffingwell, the Dulles brothers and, more recently, Arthur H. Dean, Philip D. Reed, and John J. McCloy. Other nonlegal agents of Morgan included men like Owen D. Young and Norman H. Davis.
On this basis, which was originally financial and goes back to George Peabody, there grew up in the twentieth century a power structure between London and New York which penetrated deeply into university life, the press, and the practice of foreign policy. In England the center was the Round Table Group, while in the United States it was J. P. Morgan and Company or its local branches in Boston, Philadelphia, and Cleveland. Some rather incidental examples of the operations of this structure are very revealing, just because they are incidental. For example, it set up in Princeton a reasonable copy of the Round Table Group’s chief Oxford headquarters, All Souls College. This copy, called the Institute for Advanced Study, and best known, perhaps, as the refuge of Einstein, Oppenheimer, John von Neumann, and George F. Kennan, was organized by Abraham Flexner of the Carnegie Foundation and Rockefeller’s General Education Board after he had experienced the delights of All Souls while serving as Rhodes Memorial Lecturer at Oxford. The plans were largely drawn by Tom Jones, one of the Round Table’s most active intriguers and foundation administrators.
The American branch of this “English Establishment” exerted much of its influence through five American newspapers (The New York Times, New York Herald Tribune, Christian Science Monitor, the Washington Post, and the lamented Boston Evening Transcript). In fact, the editor of the Christian Science Monitor was the chief American correspondent (anonymously) of The Round Table, and Lord Lothian, the original editor of The Round Table and later secretary of the Rhodes Trust (1925–1939) and ambassador to Washington, was a frequent writer in the Monitor. It might be mentioned that the existence of this Wall Street, Anglo-American axis is quite obvious once it is pointed out. It is reflected in the fact that such Wall Street luminaries as John W. Davis, Lewis Douglas, Jock Whitney, and Douglas Dillon were appointed to be American ambassadors in London.
This double international network in which the Round Table groups formed the semisecret or secret nuclei of the Institutes of International Affairs was extended into a third network in 1925, organized by the same people for the same motives. Once again the mastermind was Lionel Curtis, and the earlier Round Table Groups and Institutes of International Affairs were used as nuclei for the new network. However, this new organization for Pacific affairs was extended to ten countries, while the Round Table Groups existed only in seven. The new additions, ultimately China, Japan, France, the Netherlands, and Soviet Russia, had Pacific councils set up from scratch. In Canada, Australia, and New Zealand, Pacific councils, interlocked and dominated by the Institutes of International Affairs, were set up. In England, Chatham House served as the English center for both nets, while in the United States the two were parallel creations (not subordinate) of the Wall Street allies of the Morgan Bank. The financing came from the same international banking groups and their subsidiary commercial and industrial firms. In England, Chatham House was financed for both networks by the contributions of Sir Abe Bailey, the Astor family, and additional funds largely acquired by the persuasive powers of Lionel Curtis. The financial difficulties of the IPR Councils in the British Dominions in the depression of 1919-1935 resulted in a very revealing effort to save money, when the local Institute of International Affairs absorbed the local Pacific Council, both of which were, in a way, expensive and needless fronts for the local Round Table groups.
The chief aims of this elaborate, semisecret organization were largely commendable: to coordinate the international activities and outlooks of all the English-speaking world into one (which would largely, it is true, be that of the London group); to work to maintain the peace; to help backward, colonial, and underdeveloped areas to advance toward stability, law and order, and prosperity along lines somewhat similar to those taught at Oxford and the University of London (especially the School of Economics and the Schools of African and Oriental Studies).
These organizations and their financial backers were in no sense reactionary or Fascistic persons, as Communist propaganda would like to depict them. Quite the contrary. They were gracious and cultured gentlemen of somewhat limited social experience who were much concerned with the freedom of expression of minorities and the rule of law for all, who constantly thought in terms of Anglo-American solidarity, of political partition and federation, and who were convinced that they could gracefully civilize the Boers of South Africa, the Irish, the Arabs, and the Hindus, and who are largely responsible for the partitions of Ireland, Palestine, and India, as well as the federations of South Africa, Central Africa, and the West Indies. Their desire to win over the opposition by cooperation worked with Smuts but failed with Hertzog, worked with Gandhi but failed with Menon, worked with Stresemann but failed with Hitler, and has shown little chance of working with any Soviet leader. If their failures now loom larger than their successes, this should not be allowed to conceal the high motives with which they attempted both.
It was this group of people, whose wealth and influence so exceeded their experience and understanding, who provided much of the framework of influence which the Communist sympathizers and fellow travelers took over in the United States in the 1930’s. It must be recognized that the power that these energetic Left-wingers exercised was never their own power or Communist power but was ultimately the power of the international financial coterie, and, once the anger and suspicions of the American people were aroused, as they were by 1950, it was a fairly simple matter to get rid of the Red sympathizers. Before this could be done, however, a congressional committee, following backward to their source the threads which led from admitted Communists like Whittaker Chambers, through Alger Hiss, and the Carnegie Endowment to Thomas Lamont and the Morgan Bank, fell into the whole complicated network of the interlocking tax-exempt foundations. The Eighty-third Congress in July 1953 set up a Special Committee to Investigate Tax-Exempt Foundations with Representative B. Carroll Reece, of Tennessee, as chairman. It soon became clear that people of immense wealth would be unhappy if the investigation went too far and that the “most respected” newspapers in the country, closely allied with these men of wealth, would not get excited enough about any relevations to make the publicity worth while, in terms of votes or campaign contributions. An interesting report showing the Left-wing associations of the interlocking nexus of tax-exempt foundations was issued in 1954 rather quietly. Four years later, the Reece committee’s general counsel, René A. Wormser, wrote a shocked, but not shocking, book on the subject called Foundations: Their Power and Influence.
One of the most interesting members of this Anglo-American power structure was Jerome D. Greene (1874–1959). Born in Japan of missionary parents, Greene graduated from Harvard’s college and law school by 1899 and became secretary to Harvard’s president and corporation in 1901–1910. This gave him contacts with Wall Street which made him general manager of the Rockefeller Institute (1910-1912), assistant to John D. Rockefeller in philanthropic work for two years, then trustee ‚ to the Rockefeller Institute, to the Rockefeller Foundation, and to the Rockefeller General Education Board until 1939. For fifteen years (1917–1932) he was with the Boston investment banking firm of Lee, Higginson, and Company, most of the period as its chief officer, as well as with its London branch. As executive secretary of the American section of the Allied Maritime Transport Council, stationed in London in 1918, he lived in Toynbee Hall, the world’s first settlement house, which had been founded by Alfred Milner and his friends in 1884. This brought him in contact with the Round Table Group in England, a contact which was strengthened in 1919 when he was secretary to the Reparations Commission at the Paris Peace Conference. Accordingly, on his return to the United States he was one of the early figures in the establishment of the Council on Foreign Relations, which served as the New York branch of Lionel Curtis’s Institute of International Affairs.
As an investment banker, Greene is chiefly remembered for his sales of millions of dollars of the fraudulent securities of the Swedish match king, Ivar Kreuger. That Greene offered these to the American investing public in good faith is evident from the fact that he put a substantial part of his own fortune in the same investments. As a consequence, Kreuger’s suicide in Paris in April 1932 left Greene with little money and no job. He wrote to Lionel Curtis, asking for help, and was given, for two years, a professorship of international relations at Aberystwyth, Wales. The Round Table Group controlled that professorship from its founding by David Davies in 1919, in spite of the fact that Davies, who was made a peer in 1932, had broken with the Round Table because of its subversion of the League of Nations and European collective security.
On his return to America in 1934, Greene also returned to his secretaryship of the Harvard Corporation and became, for the remainder of his life, practically a symbol of Yankee Boston, as trustee and officer of the Boston Symphony Orchestra, the Gardner Museum in Fenway Court, the New England Conservatory of Music, the American Academy in Rome, the Brookings Institution, the Rockefeller Foundation, and the General Education Board (only until 1939). He was also director of the Harvard Tercentenary Celebration in 1934–1937.
Greene is of much greater significance in indicating the real influences within the Institute of Pacific Relations than any Communists or fellow travelers. He wrote the constitution for the IPR in 1926, was for years the chief conduit for Wall Street funds and influence into the organization, was treasurer of the American Council for three years, and chairman for three more, as well as chairman of the International Council for four years.
Jerome Greene is a symbol of much more than the Wall Street influence in the IPR. He is also a symbol of the relationship between the financial circles of London and those of the eastern United States which reflects one of the most powerful influences in twentieth-century American and world history. The two ends of this English-speaking axis have sometimes been called, perhaps facetiously, the English and American Establishments. There is, however, a considerable degree of truth behind the joke, a truth which reflects a very real power structure. It is this power structure which the Radical Right in the United States has been attacking for years in the belief that they are attacking the Communists. This is particularly true when these attacks are directed, as they so frequently are at “Harvard Socialism,” or at “Left-wing newspapers” like The New York Times and the Washington Post, or at foundations and their dependent establishments, such as the Institute of International Education.
These misdirected attacks by the Radical Right did much to confuse the American people in the period 1948–1955, and left consequences which were still significant a decade later. By the end of 1953, most of these attacks had run their course. The American people, thoroughly bewildered at widespread charges of twenty years of treason and subversion, had rejected the Democrats and put into the White House the Republican Party’s traditional favorite, a war hero, Dwight D. Eisenhower. At the time, two events, one public and one secret, were still in process. The public one was the Korean War of 1950-1953; the secret one was the race for the thermonuclear bomb.