Under these circumstances, it became impossible for Morgan to find new buyers for the Allied war bonds, neither for fresh funding nor to replenish the old bonds which were coming due and facing default. This was serious on several counts. If bond sales came to a halt, there would be no money to continue purchasing war materials. Commissions would be lost at both ends. Furthermore^ if the previously sold bonds were to go into default, as they certainly would if Britain and France were forced to accept peace on Germany's terms, the investors would sustain gigantic losses.
1. Balfour MSS, FO/800/208, British Foreign Office records, Public Record Office, London, as cited by Robert H. Ferrell,
2. Ferrell, p. 12.
3. William G. McAdoo,
New York: Kennikat Press, 1971), p. 392.
4. Ferrell, p. 88.
SINK THE LUSITANIA!
239
As previously mentioned by William McAdoo, the American
ambassador to England at that time was Walter Hines Page, a trustee of Rockefeller's social-engineering foundation called the General Education Board. It was learned by the Nye committee that, in addition to his government salary, which he complained was not high enough, Page also received an allowance of $25,000 a year (an enormous amount in 1917) from Cleveland Dodge, president of Rockefeller's National City Bank. On March 15, 1917, Ambassador Page sent a telegram to the State Department outlining the financial crisis in England. Since sources of new capital had dried up, the only way to keep the war going, he said, was to make direct grants from the U.S. Treasury. But, since this would be a violation of neutrality treaties, the United States would have to abandon its neutrality and enter the war. He said:
I think that the pressure of this approaching crisis has gonebeyond the ability of the Morgan Financial Agency for the British andFrench Governments.... The greatest help we could give the Allieswould be such a credit.... Unless we go to war with Germany, ourGovernment, of course, cannot make such a direct grant of credit.1
The Morgan group had floated one-and-a-half billion dollars in loans to Britain and France. With the fortunes of war turning against them, investors were facing the threat of a total loss. As Ferdinand Lundberg observed: "The declaration of war by the United States, in addition to extricating the wealthiest American families from a dangerous situation, also opened new vistas of profits."2
COLONEL HOUSE
One of the most influential men behind the scenes at this time was Colonel Edward Mandell House, personal adviser to Woodrow Wilson and, later, to F.D.R. House had close contacts with both J.P.
Morgan and the old banking families of Europe. He had received several years of his schooling in England and, in later years, surrounded himself with prominent members of the Fabian Society.
Furthermore, he was a man of great personal wealth, most of it acquired during the War Between the States. His father, Thomas William House, had acted as the confidential American agent of 1- Quoted by Ferdinand Lundberg,
(1983), pp. 336-37, cited by Ferrell, p. 90.
2- Lundberg, pp. 141-42.
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THE CREATURE FROM JEKYLL ISLAND
unknown banking interests in London. It was commonly believed he represented the Rothschilds. Although settled in Houston, Texas, the elder often remarked that he wanted his sons to "know and serve England." He was one of the few residents of a Confederate state who emerged from the War with a great fortune.
It is widely acknowledged that Colonel House was the man who selected Wilson as a presidential candidate and who secured his nomination.1 He became Wilson's constant companion, and the President admitted publicly that he depended on him greatly for instruction and guidance. Many of Wilson's important appointive posts in government were hand selected by House. He and Wilson even went so far as to develop a private code so they could communicate freely over the telephone. The President himself had written:
