The London Connection,
The Hitler Connection,
World War One,
The Money Creators,
The Great Depression

excerpted from the book

The Secrets of the Federal Reserve

by Eustace Mullins

Bankers Research Institute, 1983, paperback

(originally published in 1952 as "Mullins on the Federal Reserve")

Benjamin Disraeli, Prime Minister of England during Queen Victoria' reign

The world is governed by very different personages from what is imagined by those who are not behind the scenes.

Because of England's loss of her colonial empire after the Second World War, it seemed that her influence as a world political power was waning. Essentially, this was true. The England of 1980 is not the England of 1880. She no longer rules the waves; she is a second rate, perhaps thud rate, military power, but paradoxically, as her political and military power waned, her financial power grew. In 'Capital City' we find, "On almost any measure you care to take, London is the world's leading financial centre... In the 1960s London dominance increased..."

A partial explanation of this fact is given:

Daniel Davison, head of London's Morgan Grenfell, said, 'The American banks have brought the necessary money, customers, capital and skills which have established London in its present preeminence .... only the American banks have a lender of last resort. The Federal Reserve Board of the United States can, and does, create dollars when necessary. Without the Americans, the big dollar deals cannot be put together. Without them, London would not be credible as an international financial centre.'

London is the world's financial center, because it can command enormous amounts of capital, created at its command by the Federal Reserve Board of the United States.

... The majority stock of the Federal Reserve Bank of New York was purchased by three New York City banks: First National Bank, National City Bank, and the National Bank of Commerce. An examination of the principal stockholders in these banks, in 1914, and today, reveals a direct London connection.

The astounding idea that the Federal Reserve System of the United States is actually operated from London will probably be rejected at first hearing by most Americans. However, Minsky has become famous for his theory of the "dominant frame He states that in any particular situation, there is a "dominant frame" to which everything in that situation is related and through which it can be interpreted. The "dominant frame" in the monetary policy decisions of the Federal Reserve System is that these decisions are made by those who stand to benefit most from them. At first glance, this would seem to be the principal stockholders of the Federal Reserve Bank of New York. However ... these stockholders all have a "London Connection The "London Connection" becomes more obvious as the dominant power when we find in [the book] 'The Capital City', that only seventeen firms are allowed to operate as merchant bankers in the City of London, England's financial district. All of them must be approved by the Bank of England. In fact, most of the Governors of the Bank of England come from the partners of these seventeen firms... five merchant banking firms of London actually control the New York banks which own the controlling interest in the Federal Reserve Bank of New York.

... The London merchant bankers, with their power to set the price of gold each day, become the final arbiters of the volume of money and the price of money in those countries which must bow to their power. Not the least of these is the United States. No official of the Federal Reserve Bank of New York, or of the Federal Reserve Board of Governors, can command the power over the money of the world which is held by these London merchant bankers. Great Britain, while waning in political and military power, today exercises the greatest financial power. It is for this reason that London is the present financial center of the world.

J. Henry Schroder Banking Company is listed as Number 2 in capitalization [in the book] 'Capital City' on the list of the seventeen merchant bankers who make up the exclusive Accepting Houses Committee in London.

Victor Perlo, in the book The Empire of High Finance

The Hitler government made the London Schroder Bank their financial agent in Britain and America.

The Heritage Foundation has ... been an important factor in the policy-making of the Reagan Administration... the Heritage Foundation is part of the Tavistock Institute network, directed by British Intelligence. The financial decisions are still made at the Bank of England, and who is head of the Bank of England? Sir Gordon Richardson, chairman of J. Henry Schroder Co. of London and New York from 1962 to 1972, when he became Governor of the Bank of England. The "London Connection" has never been more firmly in the saddle of the United States Government.

From 1887 to 1914, [a] precarious system of heavily armed but bankrupt European nations endured, while the United States continued to be a debtor nation, borrowing money from abroad, but making few international loan because we did not have a central bank or "mobilization of credit". The system of national loans developed by the Rothschilds served to finance European struggles during the nineteenth century, because they were spread out over Rothschild branches in several countries. By 1900, it was obvious that the European countries could not afford a major war. They had large standing armies, universal military service, and modern weapons, but their economies could not support the enormous expenditures. The Federal Reserve System began operations in 1914, forcing the American people to lend the Allies twenty-five billion dollars which was not repaid, although considerable interest was paid to New York bankers. The American people were driven to make war on the German people with whom we had no conceivable political or economic quarrel.

Cordell Hull, in his Memoirs:

The conflict [World War I] forced the further development of the income-tax principle. Aiming, as it did, at the one great untaxed source of revenue, the income-tax law had been enacted in the nick of time to meet the demands of war. And the conflict also assisted the putting into effect of the Federal Reserve System, likewise in the nick of time.

The [international] bankers had been waiting since 1887 for the United States to enact a central bank plan so that they could finance a European war among the nations whom they had already bankrupted with armament and "defense' programs. The most demanding function of the central bank mechanism is war finance.

Woodrow Wilson

The World War[ I] was a matter of economic rivalry?


When the Communist Revolution seemed in doubt, Wilson sent his personal emissary, Elihu Root, to Russia with one hundred million dollars from his Special Emergency War Fund to save the toppling Bolshevik regime.

Bernard Baruch, testifying before the Nye Committee on September 13, 1917

All wars are economic in their origin.

[There is a] linear connection between the Rothschilds and the Bank of England, and the London banking houses which ultimately control the Federal Reserve Banks through their stockholdings of bank stock and their subsidiary firms in New York. The two principal Rothschild representatives in New York, J.P. Morgan Co. and Kuhn, Loeb & Co. were the firms which set up the Jekyll Island conference at which the Federal Reserve Act was drafted, who directed the subsequent successful campaign to have the plan enacted into law by Congress, and who purchased the controlling amounts of stock in the Federal Reserve Bank of New York in 1914. These firms had their principal officers appointed to the Federal Reserve Board of Governors and the Federal Advisory Council in 1914.

The Henry Schroder Banking Company encompasses the entire history of the twentieth century... The head of the Bank of England since 1973, Sir Gordon Richardson, Governor of the Bank of England (controlled by the House of Rothschild), was chairman of Henry Schroder Wagg and Company of London from 1963-72, and director of Henry Schroder, New York, and Schroder Banking Corporation, New York, as well as Lloyd's Bank of London, and Rolls Royce. He maintains a residence on Sutton Place in New York City, arid as head of 'The London Connection' can be said to be the single most influential banker in the world.

The bankers at the conference [Versailles Peace Conference ending World War I] convinced [President Woodrow] Wilson that they needed an international government to facilitate their international monetary operations. Vol. IV, p. 52, Intimate Papers of Cot. House quotes a message from Sir William Wiseman to Lord Reading, August 16, 1918, "The President has two main principles in view; there must he a League of Nations and it must be virile."

Wilson, who seems to have lived in a world of fantasy, was shocked when American citizens booed him during his campaign to have them sign over their hard won independence to what appeared to many to be an international dictatorship. He promptly went into a depression, and retired to his bedroom. His wife immediately shut the White House doors against Col. House, and from September 25, 1919 to April 13, 1920, she ruled the United States with the aid of an intimate friend, her "military aide", Col. Rixey Smith. As everyone was shut out of their deliberations, no one ever knew which of the pair functioned as the President, and which was the Vice President.

The admirers of Woodrow Wilson were led for decades by Bernard Baruch, who stated that Woodrow Wilson was the greatest man he ever knew. Wilson's appointments to the Federal Reserve Board, and that body's responsibility for financing the First World War, as well as Wilson's handing over the United States to the immigrant triumvirate during the War, made him appear to he the most important single effector of ruin in American history.

It is no wonder that after his abortive trip to Europe, where he was hissed and jeered in the streets by the French people, and snickered at in the halls of Versailles by Orlando and Clemenceau, Woodrow Wilson returned home to take to his bed. The sight of the destruction and death in Europe, for which he was directly responsible, was perhaps more of a shock than he could bear.

The organization of powerful trusts in Russia under the guise of Communism made possible the receipt of large amounts of financial and technical help from the United States. The Russian aristocracy had been wiped out because it was too inefficient to manage a modem industrial state. The international financiers provided funds for Lenin and Trotsky to overthrow the Czarist regime and keep Russia in the First World War. Peter Drucker, spokesman for the oligarchy in America, declared in an article in the Saturday Evening Post in 1948, that:


... Admiral Kolchak, leader of the White Russian armies, was supported by the international bankers, who sent British and American troops to Siberia in order to have a pretext for printing Kolchak rubles

... The international gold dealings of the Federal Reserve System, its active support in helping the League of Nations to force all the nations of Europe and South America back on the gold standard for the benefit of international gold merchants like Eugene Meyer, Jr. and Albert Strauss, is best demonstrated by a classic incident, the sterling credit of 1925.

J.E. Darling wrote, in the English periodical, "Spectator' on January 10, 1925 that:

Obviously, it is of the first importance to the United States to induce England to resume the gold standard as early as possible. An American controlled Gold Standard, which must inevitably result in the United States becoming the world's supreme financial power, makes England a tributary and satellite, and New York the world's financial centre.

Mr. Darling fails to point out that the American people have as little to do with this as the British people, and at resumption of the gold standard by Britain would benefit only that small group of international merchants who own the world's gold. No wonder that "Banker's Magazine!' gleefully remarked in July, 1975-that:

"The outstanding event of the past half year in the banking world was the restoration of the gold standard."

The First World War changed the status of the United States from that of a debtor nation to the position of the world's greatest creditor nation, a title formerly occupied by England. Since debt is money, according to the Governor Marriner Eccles of the Federal Reserve Board, this also made us the richest nation of the world. The war also caused the removal of the headquarters of the world's acceptance market from London to New York, and Paul Warburg became the most powerful trade acceptance banker in the world. The mainstay of the international financiers, however, remained the same. The gold standard was still the basis of foreign exchange, and the small group of internationals who owned the gold controlled the monetary systems of the Western nations.

Professor Gustav Cassel wrote in 1928:

"The American dollar, not the gold standard, is the world's monetary standard. The American Federal Reserve Board has the power to determine the purchasing power of the dollar by making changes in the rate of discount, and thus controls the monetary standard of the world."

The true allegiance of the members of the Federal Reserve Board has always been to the central bankers. The three features of the central bank [are] its ownership by private stockholders who receive rent and profit for their use of the nation's credit, absolute control of the nation's financial resources, and mobilization of the nation's credit to finance foreigners.

Governor Marriner Eccles of the Federal Reserve Board stated before the House Banking and Currency Committee that; "Debt is the basis for the creation of money."

The League of Nations had achieved its goal of getting the nations of Europe back on the gold standard by 1928, but three-fourths of the world's gold was in France and the United States. The problem was how to get that gold to countries which needed it as a basis for money and credit. The answer was action by the Federal Reserve System.

Following the secret meeting of the Federal Reserve Board and the heads of the foreign central banks in 1927, the Federal Reserve Banks in a few months doubled their holdings of Government securities and acceptances, which resulted in the exportation of five hundred million dollars in gold in that year. The System's market activities forced the rates of call money down on the Stock Exchange, and forced gold out of the country. Foreigners also took this opportunity to purchase heavily in Government securities because of the low call money rate.

"The agreement between the Bank of England and the Washington Federal Reserve authorities many months ago was that we would force the export of 725 million of gold by reducing the bank rates here, thus helping the stabilization of France and Europe and putting France on a gold basis."' (April 20, 1928)

On February 6, 1929, Mr. Montagu Norman, Governor of the Bank of England, came to Washington and had a conference with Andrew Mellon, Secretary of the Treasury. Immediately after that mysterious visit, the Federal Reserve Board abruptly changed its policy and pursued a high discount rate policy, abandoning the cheap money policy which it had inaugurated in 1927 after Mr. Norman's other visit. The stock market crash and the deflation of the American people's financial structure was scheduled to take place in March. To get the ball rolling, Paul Warburg gave the official warning to the traders to get out of the market. In his annual report to the stockholders of his International Acceptance Bank, in March, 1929, Mr. Warburg said:

"If the orgies of unrestrained speculation are permitted to spread, the ultimate collapse is certain not only to affect the speculators themselves, but to bring about a general depression involving the entire country".

During three years of "unrestrained speculation", Mr. Warburg had not seen fit to make any remarks about the condition of the Stock Exchange. A friendly organ, The New York Times, not only gave the report two columns on its editorial page, but editorially commented on the wisdom and profundity of Mr. Warburg's observations. Mr. Warburg's concern was genuine, for the stock market bubble had gone much farther than it had been intended to go, and the bankers feared the consequences if the people realized what was going on. When this report in The New York Times started a sudden wave of selling on the Exchange, the bankers grew panicky, and it was decided to ease the market somewhat. Accordingly, Warburg's National City Bank rushed twenty-five million dollars in cash to the call money market, and postponed the day of the crash.

The revelation of the Federal Reserve Board's final decision to trigger he Crash of l929, appears, amazingly enough, in The New York Times. On April 20, 1929, the Times headlined, "Federal Advisory Council Mystery Meeting in Washington. Resolutions were adopted by the council and transmitted to the board, but their purpose was closely guarded. An atmosphere of deep mystery was thrown about the proceedings both by the board and the council. Every effort was made to guard the proceedings of this extraordinary session. Evasive replies were given to newspaper correspondents."

Only the innermost council of "The London Connection" knew that it had been decided at this "mystery meeting" to ring down the curtain / on the greatest speculative boom in American history. Those in the know began to sell off all speculative stocks and put their money in government ( bonds. Those who were not privy to this secret information, and they / included some of the wealthiest men in America, continued to hold their speculative stocks and lost everything they had.

In "FDR, My Exploited Father-in-Law", Col. Curtis B. Dall, who was a broker on Wall Street at that time, writes of the Crash, "Actually it was the calculated 'shearing' of the public by the World Money-Powers, triggered by the planned sudden shortage of the supply of call money in the New York money market." Overnight, the Federal Reserve System had raised the call rate to twenty percent. Unable to meet this rate, the speculators' only alternative was to jump out of windows.

The New York Federal Reserve Bank rate, which dictated the national interest rate, went to six percent on November 1, 1929. After the investors had been bankrupted, it dropped to one and one-half percent on May 8, 1931. Congressman Wright Patman in "A Primer On Money", says that the money supply decreased by eight billion dollars from 1929 to 1933, causing 11,630 banks of the total of 26, 401 in the United States to go bankrupt and close their doors.

The Federal Reserve Board had already warned the stockholders of the Federal Reserve Banks to get out of the Market, on February 6, 1929, but it had not bothered to say anything to the rest of the people. Nobody knew what was going on except the Wall Street bankers who were running the show.

Not only was the Federal Reserve System responsible for the First World War, which it made possible by enabling the United States to finance the Allies, but its policies brought on the world-wide depression of 1929-31. Governor Adolph C. Miller stated at the Senate Investigation of the Federal Reserve Board in 1931 that:

"If we had had no Federal Reserve System, I do not think we would have had as bad a speculative situation as we had, to begin with."

Carter Glass replied, "You have made it clear that the Federal Reserve Board provided a terrific credit expansion by these open market transactions."

Emmanuel Goldenweiser said, "In 1928-29 the Federal Board was engaged in an attempt to restrain the rapid increase in security loans and in stock market speculation. The continuity of this policy of restraint, however, was interrupted by reductions in bill rates in the autumn of 1928 and the summer of 1929".

Both J. P Morgan and Kuhn, Loeb Co. had "preferred lists" of men whom they sent advance announcements of profitable stocks... The men on these lists were fellow bankers, prominent industrialists, powerful city politicians, national Committeemen of the Republican and Democratic Parties, and rulers of foreign countries. The men on these lists were notified of the coming crash, and sold all but so-called gilt-edged stocks, General Motors, Dupont, etc. The prices on these stocks also sank to record lows, but they came up soon afterwards. How the big bankers operated in 1929 is revealed by a Newsweek story on May 30, 1936, when a Roosevelt appointee, Ralph W. Morrison, resigned from the Federal Reserve Board:

"The consensus of opinion is that the Federal Reserve Board has lost an able man. He sold his Texas utilities stock to Insull for ten million dollars, and in 1929 called a meeting and ordered his banks to close out all security loans by September 1. As a result, they rode through the depression with flying colors?'

Predictably enough, all of the big bankers rode through the depression "with flying colors:' The people who suffered were the workers and farmers who had invested their money in get-rich stocks, after the President of the United States, Calvin Coolidge, and the Secretary of the Treasury, Andrew Mellon, had persuaded them to do it.

There had been some warnings of the approaching crash in England, which American newspapers never saw. The London Statist on May 25, 1929 said:

"The banking authorities in the United States apparently want a business panic to curb speculation".

The London Economist on May 11, 1929, said:

"The events of the past year have seen the beginnings of a new technique, which, if maintained and developed, may succeed in 'rationing the speculator without injuring the trader".

Governor Charles S. Hamlin quoted this statement at the Senate hearings in 1931 and said, in corroboration of it:

"That was the feeling of certain members of the Board, to remove Federal Reserve credit from the speculator without injuring the trader".

Governor Hamlin did not bother to point out that the "speculators" he was out to break were the school-teachers and small town merchants who had put their savings into the stock market, or that the "traders" he was trying to protect were the big Wall Street operators, Bernard Baruch and Paul Warburg.

When the Federal Reserve Bank of New York raised its rate to six percent on August 9, 1929, market conditions began which culminated in tremendous selling orders from October 24 into November, which wiped out a hundred and sixty billion dollars worth of security values. That was a hundred and sixty billions which the American citizens had one month and did not have the next. Some idea of the calamity may be had if we remember that our enormous outlay of money and goods in the Second World War amounted to not much more than two hundred billions of dollars, and a great deal of that remained as negotiable securities in the national debt. The stock market crash is the greatest misfortune which the United States has ever suffered.

What had caused the [1929] crash? The people had purchased stocks at high prices and expected the prices to continue to rise. The prices had to come down, and they did. It was obvious to the economists and bankers gathered over their brandy and cigars at the Hotel Astor that the people were at fault. Certainly the people had made a mistake in buying overpriced securities, but they had been talked into it by every leading citizen from the President of the United States on down. Every magazine of national circulation, every big newspaper, and every prominent banker, economist, and politician, had joined in the big confidence game of urging people to buy those over-priced securities. When the Federal Reserve Bank of New York raised its rate to six percent, in August 1929, people began to get out of the market, and it turned into a panic which drove the prices of securities down far below their natural levels. As in previous panics, this enabled both Wall Street and foreign operators in the know to pick up "blue-chip" gilt-edged" securities for a fraction of their real value.

The New York Times reported on April 7, 1931, "Montagu Norman, Governor of the Bank of England, conferred with the Federal Reserve Board here today. Mellon, Meyer, and George L. Harrison, Governor o the Federal Reserve Bank of New York, were present".

The London Connection had sent Norman over this time to ensure that the Great Depression was proceeding according to schedule. Congressman Louis McFadden had complained, as reported in The New York Times, July 4, 1930, "Commodity prices are being reduced to 1913 levels. Wages are being reduced by the labor surplus of four million unemployed. The Morgan control of the Federal Reserve System is exercised through control of the Federal Reserve Bank of New York, the mediocre representation and acquiescence of the Federal Reserve Board in Washington?' As the depression deepened, the trust's lock on the American economy strengthened, but no finger was pointed at the parties who were trolling the system.

Secrets of the Federal Reserve

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