Jekyll_text

238 THE CREATURE FROM JEKYLL ISLAND SINK THE LUSITANIA! 239
they constantly had to be repaired and serviced, the maximum
number at sea was only seven at any one time. Yet, between 1914
and 1918, German submarines had sunk over 5,700 surface ships.
Three-hundred thousand tons of Allied shipping were sent to the
bottom every week. One out of every four steamers leaving the
British Isles never returned. In later years, British Foreign Secretary,
Arthur Balfour, wrote: "At that time, it certainly looked as though
we were going to lose the war/' Robert Ferrell, in his Woodrow
Wilson and World War J, concluded: "The Allies approached the
brink of disaster, with no recourse other than to ask Germany for
terms."
William McAdoo, who was Secretary of the Treasury at the
time, says in his memoirs:
Across the sea came the dismay of the British—a dismay that
carried a deepening note of disaster. There was a fear, and a
well-grounded one, that England might be starved into abject
surrender.... On April 27, 1917, Ambassador Walter H. Page reported
confidentially to the President that the food in the British Isles was not
more than enough to feed the civil population for six weeks or two
months.
rAs
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 gone
beyond the ability of the Morgan Financial Agency for the British and
French Governments.... The greatest help we could give the Allies
would be such a credit.... Unless we go to war with Germany, our
Government, of course, cannot make such a direct grant of credit. 1
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. Something
had to be done. But what? Robert Ferrell hints at the answer:
In the mid thirties a Senate committee headed by Gerald P. Nye of
North Dakota investigated the pre-1917 munitions trade and raised a
possibility that the Wilson administration went to war because
American bankers needed to protect their Allied loans.
1. Balfour MSS, FO/800/208, British Foreign Office records, Public Record Office,
London, as cited by Robert H. Ferrell, Woodrow Wilson and World War I (New York:
Harper & Row, 1985), p. 35.
2. Ferrell, p. 12.
3. William G. McAdoo, Crowded Years (New York: Houghton Mifflin, 1931; rpt.
New York: Kennikat Press, 1971), p. 392.
4. Ferrell, p. 88.
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, America's Sixty Families (New York: Vanguard
Press, 1937), p. 141. Also see Link et al, eds., The Papers of Woodrow Wilson, Vol. 41
(1983), pp. 336-37, cited by Ferrell, p. 90.
2- Lundberg, pp. 141-42.