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The Invisible Government

CHAPTER 1
HISTORY AND THE COUNCIL

President George Washington, in his Farewell Address to the People of the United States on September 17, 1796, established a foreign policy which became traditional and a main article of faith for the American people in their dealingswith the rest of the world.

Washington warned against foreign influence in the shaping of national affairs. He urged America to avoid permanent, entangling alliances with other nations, recommending a national policy of benign neutrality toward the rest of the world. Washington did not want America to build a wall around herself, or to become, in any sense, a hermit nation.

Washington's policy permitted freer exchange of travel, commerce, ideas, and culture between Americans and other people than Americans have ever enjoyed since the policy was abandoned. The Father of our Country wanted the American government to be kept out of the wars and revolutions and political affairs of other nations.

Washington told Americans that their nation had a high destiny, which it could not fulfill if they permitted their government to become entangled in the affairs of other nations.

Despite the fact of two foreign wars (Mexican War, 1846-1848; and Spanish American War, 1898) the foreign policy of Washington remained the policy of this nation, unaltered, for 121 years–until Woodrow Wilson's war message to Congress in April, 1917.

Wilson himself, when campaigning for re-election in 1916, had unequivocally supported our traditional foreign policy: his one major promise to the American people was that he would keep them out of the European war. Yet, even while making this promise, Wilson was yielding to a pressure he was never able to withstand: the influence of Colonel Edward M. House, Wilson's all-powerful adviser.

According to House's own papers and the historical studies of Wilson's ardent admirers (see, for example, Intimate Papers of Colonel House, edited by Charles Seymour, published in 1926 by Houghton Mifflin; and, The Crisis of the Old Order by Arthur M. Schlesinger, Jr., published 1957 by Houghton Mifflin), House created Wilson's domestic and foreign policies, selected most of Wilson's cabinet and other major appointees, and ran Wilson's State Department.

House had powerful connections with international bankers in New York. He was influential, for example, with great financial institutions represented by such people as Paul and Felix Warburg, Otto H. Kahn, Louis Marburg, Henry Morgenthau, Jacob and Mortimer Schiff, Herbert Lehman. House had equally powerful connections with bankers and politicians of Europe. Bringing all of these forces to bear, House persuaded Wilson that America had an evangelistic mission to save the world for "democracy." The first major twentieth century tragedy for the United States resulted: Wilson's war message to Congress and the declaration of war against Germany on April 6, 1917.

House also persuaded Wilson that the way to avoid all future wars was to create a world federation of nations. On May 27, 1916, in a speech to the League to Enforce Peace, Wilson first publicly endorsed Colonel House's world-government idea (without, however, identifying it as originating with House).

In September, 1916, Wilson (at the urging of House) appointed a committee of intellectuals (the first President's Brain Trust) to formulate peace terms and draw up a charter for world government. This committee, with House in charge, consisted of about 150 college professors, graduate students, lawyers, economists, writers, and others. Among them were men still familiar to Americans in the 1960's: Walter Lippmann (columnist); Norman Thomas (head of the American socialist party); Allen Dulles (former head of C.I.A.); John Foster Dulles (late Secretary of State); Christian A. Herter (former Secretary of State).

These eager young intellectuals around Wilson, under the clear eyes of crafty Colonel House, drew up their charter for world government (League of Nations Covenant) and prepared for the brave new socialist one-world to follow World War I. But things went sour at the Paris Peace Conference. They soured even more when constitutionalists in the United States Senate found out what was being planned and made it quite plain that the Senate would not authorize United States membership in such a world federation.

Bitter with disappointment but not willing to give up, Colonel House called together in Paris, France, a group of his most dedicated young intellectuals–among them, John Foster and Allen Dulles, Christian A. Herter, and Tasker H. Bliss–and arranged a dinner meeting with a group of like-minded Englishmen at the Majestic Hotel, Paris, on May 19, 1919. The group formally agreed to form an organization "for the study of international affairs."

The American group came home from Paris and formed The Council on Foreign Relations, which was incorporated in 1921. The purpose of the Council on Foreign Relations was to create (and condition the American people to accept) what House called a "positive" foreign policy for America–to replace the traditional "negative" foreign policy which had kept America out of the endless turmoil of old-world politics and had permitted the American people to develop their great nation in freedom and independence from the rest of the world.

The Council did not amount to a great deal until 1927, when the Rockefeller family (through the various Rockefeller Foundations and Funds) began to pour money into it. Before long, the Carnegie Foundations (and later the Ford Foundation) began to finance the Council.

In 1929, the Council (largely with Rockefeller gifts) acquired its present headquarters property: The Harold Pratt House, 58 East 68th Street, New York City. In 1939, the Council began taking over the U.S. State Department.

Shortly after the start of World War II, in September, 1939, Hamilton Fish Armstrong and Walter H. Mallory, of the Council on Foreign Relations, visited the State Department to offer the services of the Council. It was agreed that the Council would do research and make recommendations for the State Department, without formal assignment or responsibility. The Council formed groups to work in four general fields–Security and Armaments Problems, Economic and Financial Problems, Political Problems, and Territorial Problems.

The Rockefeller Foundation agreed to finance, through grants, the operation of this plan. In February, 1941, the Council on Foreign Relations' relationship with the State Department changed. The State Department created the Division of Special Research, which was divided into Economic, Security, Political, Territorial sections. Leo Pasvolsky, of the Council, was appointed Director of this Division. Within a very short time, members of the Council on Foreign Relations dominated this new Division in the State Department.

During 1942, the State Department set up the Advisory Committee on Postwar Foreign Policy. Secretary of State Cordell Hull was Chairman. The following members of the Council on Foreign Relations were on this Committee: Under Secretary of State Sumner Welles (Vice-Chairman), Dr. Leo Pasvolsky (Executive Officer); Hamilton Fish Armstrong, Isaiah Bowman, Benjamin V. Cohen, Norman H. Davis, and James T. Shotwell. Other members of the Council also found positions in the State Department: Philip E. Mosely, Walter E. Sharp, and Grayson Kirk, among others.

The crowning moment of achievement for the Council came at San Francisco in 1945, when over 40 members of the United States Delegation to the organizational meeting of the United Nations (where the United Nations Charter was written) were members of the Council. Among them: Alger Hiss, Secretary of State Edward R. Stettinius, Leo Pasvolsky, John Foster Dulles, John J. McCloy, Julius C. Holmes, Nelson A. Rockefeller, Adlai Stevenson, Joseph E. Johnson, Ralph J. Bunche, Clark M. Eichelberger, and Thomas K. Finletter.

By 1945, the Council on Foreign Relations, and various foundations and other organizations interlocked with it, had virtually taken over the U.S. State Department. Some CFR members were later identified as Soviet espionage agents: for example, Alger Hiss and Lauchlin Currie.

Other Council on Foreign Relations members–Owen Lattimore, for example–with powerful influence in the Roosevelt and Truman Administrations, were subsequently identified, not as actual communists or Soviet espionage agents, but as "conscious, articulate instruments of the Soviet international conspiracy."

I do not intend to imply by these citations that the Council on Foreign Relations is, or ever was, a communist organization. Boasting among its members Presidents of the United States (Hoover, Eisenhower, and Kennedy), Secretaries of State, and many other high officials, both civilian and military, the Council can be termed, by those who agree with its objectives, a "patriotic" organization. The fact, however, that communists, Soviet espionage agents, and pro-communists could work inconspicuously for many years as influential members of the Council indicates something very significant about the Council's objectives.

The ultimate aim of the Council on Foreign Relations (however well-intentioned its prominent and powerful members may be) is the same as the ultimate aim of international communism: to create a one-world socialist system and make the United States an official part of it. Some indication of the influence of CFR members can be found in the boasts of their best friends. Consider the remarkable case of the nomination and confirmation of Julius C. Holmes as United States Ambassador to Iran. Holmes was one of the CFR members who served as United States delegates to the United Nations founding conference at San Francisco in 1945. Mr. Holmes has had many important jobs in the State Department since 1925; but from 1945 to 1948, he was out of government service.

During that early postwar period, the United States government had approximately 390 Merchant Marine oil tankers (built and used during World War II) which had become surplus. A law of Congress prohibited the government from selling the surplus vessels to foreign-owned or foreign-controlled companies, and prohibited any American company from purchasing them for resale to foreigners. The purpose of the law was to guarantee that oil tankers (vital in times of war) would remain under the control of the United States government.

Julius Holmes conceived the idea of making a quick profit by buying and selling some of the surplus tankers. Holmes was closely associated with Edward Stettinius, former Secretary of State, and with two of Stettinius' principal advisers: Joe Casey, a former U.S. Congressman; and Stanley Klein, a New York financier.

In August, 1947, this group formed a corporation (and ultimately formed others) to buy surplus oil tankers from the government. The legal and technical maneuvering which followed is complex and shady, but it has all been revealed and reported by congressional committees.

Holmes and his associates managed to buy eight oil tankers from the U.S. government and re-sell all of them to foreign interests, in violation of the intent of the law and of the surplus-disposal program. One of the eight tankers was ultimately leased to the Soviet Union and used to haul fuel oil from communist Romania to the Chinese reds during the Korean war.

By the time he returned to foreign service with the State Department in September, 1948, Holmes had made for himself an estimated profit of about one million dollars, with practically no investment of his own money, and at no financial risk.

A Senate subcommittee, which, in 1952, investigated this affair, unanimously condemned the Holmes-Casey-Klein tanker deals as "morally wrong and clearly in violation of the intent of the law," and as a "highly improper, if not actually illegal, get-rich-quick" operation which was detrimental to the interests of the United States.

Holmes and his associates were criminally indicted in 1954– but the Department of Justice dismissed the indictments on a legal technicality later that same year. A few weeks after the criminal indictment against Holmes had been dismissed, President Eisenhower, in 1955, nominated Julius C. Holmes to be our Ambassador to Iran.

Enough United States Senators in 1955 expressed a decent sense of outrage about the nomination of such a man for such a post that Holmes "permitted" his name to be withdrawn, before the Senate acted on the question of confirming his appointment. The State Department promptly sent Holmes to Tangier with the rank of Minister; brought him back to Washington in 1956 as a Special Assistant to the Secretary of State; and sent him out as Minister and Consul General in Hong Kong and Macao in 1959.

And then, in 1961, Kennedy nominated Julius C. Holmes for the same job Eisenhower had tried to give him in 1955–Ambassador to Iran.

Arguing in favor of Holmes, Senator Prescott Bush admitted that Holmes' tanker deals were improper and ill-advised, but claimed that Holmes was an innocent victim of sharp operators! The "innocent" victim made a million dollars in one year by being victimized. He has never offered to make restitution to the government. Moreover, when questioned, in April, 1961, Holmes said he still sees nothing wrong with what he did and admits he would do it again if he had the opportunity–and felt that no congressional committee would ever investigate.