Frenzied Finance, Vol. 1: The Crime of Amalgamated

by Thomas William Lawson

But to return to "Standard Oil's" financial weavings: Their next move was to use Standard Oil stock as the basis for loans, that is, as collateral for money borrowed from the banks, trust and insurance companies, and treasuries of other great corporations and estates. The money thus acquired was paid out to purchase the control of banks and trust and insurance companies in all parts of the United States, the Standard Oil ownership being represented by dummy directors and officers.

The next move represents another of the dazzling devices of finance in which "Standard Oil" is adept, and brings the process of artificial expansion still further along. Control of a certain number of these savings and national banks and trust and insurance companies having been acquired, the funds of each were so manipulated by depositing those of one institution with another, and the latter's in turn with the first, as to swell the deposits of all and create in all of them an apparently legitimate basis for increases of capitalization. At the same time there was shown an apparently legitimate necessity for the establishment of additional banking and trust companies, which were duly organized and their assets juggled around by the same process. The result of all this manipulation defies description. Throughout the series of correlated institutions loans and deposits are multiplied in such an intricacy of duplication that only a few able experts, employed by the "System" because of their mathematical genius, are able to unravel the tangle to the extent of approximating the proportion the legitimate funds bear to those which have been created by the financial jugglery I have indicated.

When "Standard Oil" had gathered into its net sufficient of the important private institutions of finance there still remained the federal Government, the largest handler of money in the country. It was not hard for "Standard Oil" to introduce its expert votaries into the United States Treasury and thus to steer the millions of the nation into the banks subject to the "System's" control. This accomplished, the structure was complete and the process of "making" dollars proceeded on a magnificent scale.

That there may be no possible doubt in the minds of those of my readers who are unacquainted with such matters that I am citing every-day, actual happenings, I will tell just how the Daly-Haggin-Tevis-Anaconda-Amalgamated transaction was worked out, showing that but for the existence of the National City Bank of New York, or a like institution of the people, it could not have been brought about.

When Mr. Rogers and William Rockefeller "traded" with Messrs. Daly, Haggin, and Tevis for the Anaconda stock, and with others for like stock or other properties which I have already named, the price agreed upon was $24,000,000 to Daly, Haggin, and Tevis, and $15,000,000 to the others, or $39,000,000 in all. This was to be paid by "Standard Oil" and received by Daly, Haggin, and Tevis, and the others, but one of the stipulations in the "trade" was that instead of the money's being paid to Daly, Haggin, and Tevis, and others direct, it was to be credited to them on the books of the National City Bank of New York and was to be, by agreement, not withdrawn from the bank before a given time, the bank agreeing that the new owners of this money should receive interest at a low rate upon it while it so remained deposited. At the same time the bank agreed to loan Mr. Rogers and William Rockefeller the $39,000,000 at the same rate of interest upon the collateral which the $39,000,000 was used in purchasing. Therefore the first part of the transaction was as follows:

The bank, having $39,000,000 on hand belonging to the public in the form of savings deposited, or having a fictitious $39,000,000 in the form of book-keeping accounts made possible by the deposits of the public and the manipulation of the funds in other banks and trust and insurance companies belonging to the public or the Government, caused an entry to be made in its books showing that this $39,000,000 had been loaned to Mr. Rogers and William Rockefeller, and that they, having transferred it to Daly, Haggin, Tevis, and others, were, upon the books of the bank, the real owners.

The second part was the summoning into the City Bank of certain "Standard Oil" lawyers, office-boys, and clerks, and the organization by them of the Amalgamated Copper Company. The lawyers drew up the papers and the office-boys and clerks signed them. First, the papers certified that "whereas we (the office-boys and clerks) are desirous of taking advantage of the corporation laws of the State of New Jersey, we (the said office-boys and clerks) do so take advantage of the said laws and form ourselves into the Amalgamated Copper Company, which will have a capital of $75,000,000, and which will be allowed by said laws to own copper-mines and other things, to mine copper and other things, to manufacture, buy, sell, and trade in copper and other things, and to do numerous and variegated other things; and that whereas we (the said office-boys and clerks) have now become the Amalgamated Copper Company, one of our number will purchase the entire capital stock of the said Amalgamated Copper Company for $75,000,000 cash, which $75,000,000 cash we herewith certify to have been paid in the form of a check for $75,000,000, herewith delivered to the treasurer, one of our number, by the clerk who drew it; and the treasurer, herewith certifying that he has received the $75,000,000, herewith delivers unto said clerk the $75,000,000 capital stock of the Amalgamated Copper Company, and we (the said office-boys and clerks) herewith certify that there is within the treasury of the Amalgamated Copper Company $75,000,000, and we (the said office-boys and clerks) vote that it, the said $75,000,000, shall be used in the purchase of certain stocks and properties, and said certain stocks and properties shall be the same stocks and properties previously purchased by Mr. Rogers and William Rockefeller, and now owned by them, and we (the said office-boys and clerks) herewith certify that we have paid from the treasury $75,000,000, that said $75,000,000 is in the form of a check, and said check is the one previously received, or its equivalent, by our treasurer, from one of our number, to wit, the clerk referred to earlier in these papers, and said $75,000,000 has been paid to Henry H. Rogers for his and William Rockefeller's use." Henry H. Rogers, now having $75,000,000, where formerly he had stocks and properties which had cost him $39,000,000, and being desirous of investing it, purchased from the clerk the $75,000,000 of Amalgamated stock which he, the clerk, had previously purchased from the treasury of the Amalgamated Company, Mr. Rogers promptly paying for said purchase with the $75,000,000 check or its equivalent, which has already done such yeoman service.

The organization of the Amalgamated Copper Company of New Jersey now being complete, and the company being in possession of all the property which had formerly belonged to Mr. Rogers and William Rockefeller, and which had cost them $39,000,000, and the clerk having again come into possession of his $75,000,000 check, and Mr. Rogers and William Rockefeller being the sole owners of the $75,000,000 of Amalgamated stock, the second part of this transaction was completed. The third began by the office-boys and clerks resigning from their positions as directors and officers of the Amalgamated Copper Company of New Jersey in favor of the more responsible and better known "Standard Oil" votaries. Mr. Rogers and William Rockefeller then had the National City Bank of New York offer for sale to the public the $75,000,000 of stock in such a way that, although it was then the private property of Mr. Rogers and William Rockefeller, the public were led to believe it was the property of the Amalgamated Copper Company. Simultaneously, the National City Bank of New York offered to loan the public its deposits at the rate of ninety cents on the dollar, on any amount of the Amalgamated stock it, the public, purchased; whereupon the public, taking advantage of this offer, agreed to purchase from the National City Bank of New York the $75,000,000 of stock for $75,000,000, thereby enabling it to certify upon its books that the $39,000,000 it had loaned to Messrs. Rogers and Rockefeller had been repaid, and enabling Mr. Rogers and William Rockefeller, after paying said debts to the National City Bank of New York, to become the absolute owners of $36,000,000 of money, none of which they had owned before, and which they had "made" as absolutely as though they had coined it by permit from the Government of the people who had parted with it.[3]

The fourth part of the transaction began when months afterward the public, who had borrowed their money from the National City Bank of New York and other banks and trust and insurance companies to buy Amalgamated stock at 100 cents on the dollar, were compelled to repay it, and to do so were obliged to sell the Amalgamated stock which they had purchased at $100 per share for the best price they could get, which was $33 per share; and if we suppose for a moment that the "Standard Oil," after repurchasing it at $33 per share, at a later day repeated the operation of selling it for $100 per share, it will be seen that "Standard Oil," the "Private Thing," would thereby "make" an additional $50,000,000, as absolutely as though they had been allowed by the Government to coin it.[4]

This explanation is not the creation of an extravagant fancy. It is not romance, but reality. The thing described was a supreme manifestation of the "System," of the perfect working of that tremendous financial machine which reaps, grinds, and harvests for its own benefit, the earned savings of the American people.