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We saw that the nationalist republicans were organized in Philadelphia, as a group with political, military and commercial aims. With the aid of the most advanced German scientists in geology, metallurgy and chemistry, they built up America's skills for mining and processing iron and coal, and for agro-industry; and in mathematics, astronomy and geophysics as crucial elements of military success.
The European aristocratic oligarchy, represented within the U.S. by their agents in certain Boston and New York families, sought to brake the advance of American development. Trumpeting "Free Trade" and various anti-capitalist slogans simultaneously, they scandalized and financially wrecked the developers (we might accurately rename their philosophy, Free[dom from] Enterprise). They won restrictions on the government's power to issue credit and to subsidize railroads. Their own international banking syndicate increasingly usurped the position of arbiter of America's financial affairs.
In Part 3 we will observe the fight between the Americans and the European oligarchs over the role America would be permitted to play in the less developed countries. American nationalists -- Prometheans -- proposed to help build up other nations' own capabilities for industrial and scientific achievement. A community of self-sufficient republics could then withstand the wrecking operations of the oligarchs, and eventually free the entire world from their grip.
The anti-republicans proposed that America should instead serve only as an extension of European financiers' power over world development, and that technological "disruptions," such as America's revolutionary steel and electrical complexes, should cease -- both in the United States and in the tropical countries.
This dispute over America's global purpose came to a dramatic showdown in 1881. This was effectively the last stand of the American republicans. Today, 105 years later, the U.S.A. is in urgent need of winning virtually the same contest, presented to it in precisely the same arena.
In April, 1861, when Southern separatists fired on Fort Sumter to start America's 1861-1865 Civil War, their European political sponsors were already on the march globally with new imperial adventures, threatening to drag the world back into the Dark Ages.
The British countered India's 1857-58 Sepoy Rebellion with the reinvasion and crushing of the Indian subcontinent, saving the source of their opium. They were simultaneously engaged with their French ally, Napoleon III, subduing China in the 2nd Opium War (1857-60), saving the market for their opium amongst the ungrateful Asians. The British allowed Napoleon III, meanwhile, the franchise to conquer Indochina (1858-1867), sowing the seeds for the American disaster a century later.
The instant the United States was tied up by insurrection, the European imperialists jumped to attack the unprotected southern flank of the Americas. Announcing their resolve to force debt payments from the government of Benito Juarez, the armies of Britain, France, Spain, Austria and Belgium invaded Mexico late in 1861. The British and Spanish withdrew in April, 1862, and the Mexicans defeated the French army at Puebla in May, 1862. Napoleon III reenforced the invasion and captured Mexico City early in 1863 -- just following U.S. President Abraham Lincoln's proclamation of emancipation for the millions of negro slaves held by the insurgents.
In June of 1864, the Hapsburg Prince Maximilian was installed as Emperor of Mexico. That same Spring, 1864, the navy of Spain attacked Peru, annexed Peruvian islands, and declared Spain's right to recolonize Peru.
In the following year, Argentina, Brazil and Uruguay were sponsored by the British in a genocidal war against Paraguay, killing over half the Paraguayans and breaking up that country's attempts to industrialize itself on the U.S. model.
When the rebel slaveowners surrendered to U.S. forces in 1865, the restored threat of American power helped to repair the situation south of the border. The French, pounded by Juarez's U.S.-equipped army, withdrew and left Maximilian to be executed. The Spanish dropped their pretensions to reconquer their long-lost Peruvian colony.
Neither oligarchical versions of history, nor the later political defeat of America's republicans, should divert us from understanding the American Civil War as the central theatre of a global war between freedom and slavery.
War is represented by a veteran in repose on a cannon which has seen hard use, his hand open in the hope of peace, his demeanor that of a watchful citizen-soldier rather than a militarist.
History has a book open on her lap, with the pyramids of Egypt and the columns of classical Greece cut in bas-relief.
Plenty holds a sheaf of wheat; a violin, sheet-music and a painter's pallette are by her side.
Peace is a clear-eyed mechanic holding a gear, standing next to a frieze of an industrial plant. A globe is surrounded by mariner's ropes and tools, and the motif of the pyramids is repeated, celebrating the completion during 1869 of the Suez Canal.
French engineer-diplomat Ferdinand de Lesseps had directed the Canal construction for the previous decade, despite the objections and attempted interference of the British. The khedive of Egypt commissioned Giuseppi Verdi to compose an opera in honor the opening of the Suez Canal; his "Aida" was first produced in Cairo in 1871.
Lesseps' interest in organizing Suez, a partnership of the peoples of France (whose subscriptions paid half the cost) and Egypt (whose labor built it), cohered with his family's tradition.
Ferdinand's grandfather Martin de Lesseps was French consul general in Russia during the reign of Catherine the Great, when Russia and other European powers formed the League of Armed Neutrality, helping France ally with the American colonies against Britain.
Ferdinand's father Matheu de Lesseps was director of French secret intelligence in the Middle East during the Napoleonic wars, competing with the British for influence in the Islamic world. After Napoleon's defeat, despite the subjection of France to Britain and allied continental oligarchs, Matheu de Lesseps managed to have himself appointed Consul in Philadelphia, Pennsylvania, where he lived from 1818 to 1822. He negotiated with Secretary of State John Quincy Adams a commercial treaty between France and the U.S.A.. He was in a position to counsel the Philadelphia-based American nationalists on strategic affairs, as a member of their American Philosophical Society. His friendships with the Egyptians later helped his son Ferdinand launch the Suez project, while his contacts in Philadelphia, the center for exile Spanish American patriots, would give Ferdinand the background for a similar enterprise in the New World.
At an 1875, international congress of the French Geographical Society, an organization once chaired by Alexandre von Humboldt, Ferdinand de Lesseps announced his interest in cutting an interoceanic canal through Central America. "Lazzaroni" nationalist Admiral Charles H. Davis, chief of the U.S. Naval Observatory, had sent a representative to the Paris meeting. The U.S. Navy wanted a canal for maximum mobility of its fleet, to be able to challenge Britain for naval supremacy in the Western Hemisphere. Apparently for just this reason, the British and their friends in New York and Boston opposed the canal, as long as America played an anti-colonial role in the region.
In 1880 Lesseps toured the United States to drum up American support for his new Panama Canal Company. Pennsylvania industrial figures -- Andréw Carnegie, steel engineer Alexander Holley, and the wife of crippled Brooklyn Bridge builder Augustus Roebling -- turned out to a testimonial dinner at Delmonico's in New York, the hall decked out in French and American flags. Everywhere Americans hailed Lesseps as a hero. He chose Secretary of the Navy Richard W. Thompson, a nationalist disciple of Henry Carey, as chief promoter and chairman of the Canal Company's American Committee.
Lesseps asked for American subscriptions to the stock of the company; he would be happy, he said if Americans bought a majority interest, and the company's headquarters was established in Washington or New York. But J.P. Morgan got control of the U.S. sale of its stock, and not a single share was to be sold in the United States. President Rutherford B. Hayes, under the influence of the Morgan-Rothschild international banking syndicate which had forced through Specie Resumption the previous year, turned a cold shoulder to Lesseps. Hayes declared that the Monroe Doctrine was adverse to "foreigners" building an interoceanic canal. He fired Navy Secretary Thompson for associating with the French canal effort.
The French company began digging the Canal through Colombia's Isthmus of Panana in February, 1881. The President of Colombia at the time, Dr. Rafael Nunez (1825-1894), was an exceptionally well-educated statesman. A Free Trade advocate during his earlier career, Nunez left Colombia in 1863 and spent two years in the United States covering the Civil War as a journalist. Here he was confronted with the great constitutional question, centralized republican institutions, for the enduring power of an independent nation, versus decentralization in the form of states' rights or regional autonomy. This was precisely the question facing his own country, where Nunez' British-influenced Liberal Party took the side of states rights, championing the outmoded Colombian constitution that prevented national development.
It was in the great arena of the war in North America that Nunez apparently first distinguished for himself the political realities of the nation-state from the Free Trade dogmas of British liberalism.
Nunez wrote from New York on November 2, 1864:
"...the true conservative will be he who keeps this country [the U.S.A.] standing and saves it in its present crisis...In all political societies, as in everything else, a conservative element is indispensible as a principle of existence and of progress.Nunez goes on to discuss the economic reality behind the states rights rhetoric of the "feudal gentlemen of the South." They have exaggerated "the liberal Jeffersonian legacy" to preserve their hold on the commerce of the nation, exerted through 4 million negro slaves, worth, as assets, at least $4 billion, and much more in the product of their labor. [1]"In the passionate language of parties, all the elements of this type may be confused with inaction and even with retrogression. And I say confused, because there is as much difference between the one and the other, as between good and bad, between truth and falsehood...The conservative element in this country has been the principal of national unity, fortunately and with foresight counterposed since the first years after Independence, to the dissolving doctrine of the absolute sovereignty of the States.
"This principle of national unity combined with, but superior to, privileges of local government, is the soul of the Constitution; and proof of this is that in the presidential election, the states do not vote with equality, but only in respect to their populations; and that the Constitution was not dictated by the States as independent entities or sovereignties, but by the people of the states collectively. 'We (says the Constitution) the People of the United States, in order to form a more perfect union, etc., etc., ordain and establish this Constitution.'
"The first Constitution [after the Revolution, i.e. the Articles of Confederation] had the character of a pact between sovereign States; but...all the influential men of that epoch, led by Washington...[won the establishment of the] second and final Constitution, under whose rule since 1787, the career of the United States has been so marvelous, that it is impossible to avoid recognizing the excellence of this mechanism."
Nunez spent many more years abroad, working and studying in England and in Continental Europe, before returning home. As president of Colombia in 1880-1882, and 1884-1886, he proclaimed a fully nationalist program in the tradition of Alexander Hamilton, Friedrich List, Henry Carey and Lincoln. It was in this Colombia of Rafael Nunez, that Lesseps began to build the Canal through the Colombian province (state) of Panama.
Palmer absolutely distinguished his plan from that of an imperialist, whose policies either kill or impoverish the victims of his looting. Palmer's project, backed by the Careyite nationalists, was designed to expand wealth-producing capabilities and living standards simultaneously in the United States and Mexico. The 1873 annual report of Palmer's Denver and Rio Grande Railroad stated:
"when the connection is made, an enormous through traffic will spring up between the heart of Mexico, with its harbors on two oceans, and the Rocky Mountain country of the United States -- Colorado, Kansas, Nebraska, New Mexico, Wyoming, Montana, Utah, California...."[In return for a mass of imports from Mexico, our] New West will....send back a thousand articles of domestic and agricultural use now unknown to the Mexicans -- iron plows, shovels, cooking-stoves, grates, ranges; also mining machinery and implements of all kinds, sugar, cotton, and woolenmills and brick machines, wagons and carriages, general hardware, and all sorts of tools, bar-iron and steel, wire, guns and pistols, pipe, furniture, butter, hams, cheese, lard, grapes, apples, bush and other temperate fruits, not to be had there, wines and brandies from the Rio Grande Valley of New Mexico, ice, choice stallions and bulls, etc., to improve their degenerate breeds, cotton and woolen goods, and innumerable other necessities and luxuries from which the people of Mexico have been almost entirely cut off, in consequence of their topographical isolation. The manufactured part of this list, and articles of skill generally, will at first come by this route from Chicago and St. Louis, but in a few years from the works at Canon City, Denver, Pueblo, and Albuquerque, in Colorado and New Mexico.
"In the course of time, as the artisans of Mexico become skilled, as capital there takes a manufacturing turn, as coal mines are opened, and iron works and a more complex kind of manufactures are established, many things will be made there which, for the first few years, must be imported; but, by that time, the very growth which this would indicate will render necessary an interchange manifoldly larger...."
Palmer sought the cooperation of the Mexican government for his railroad construction project. To this end, he agreed to avail himself of the services of Gen. William S. Rosecrans, who had been U.S. ambassador to Mexico in 1868 and 1869. Upon assuming office as U.S. President, Ulysses S. Grant had removed Rosecrans from his post. Grant had earlier removed Rosecrans from his position as commander of the Army of the Cumberland, after Rosecrans' flight from the battlefield of Chickamauga.
Rosecrans stayed on in Mexico, negotiating with the government of President Benito Juarez for railroad concessions. Though Juarez was said to have reached an understanding with Roscrans, Juarez died in July, 1872, and the deal was never fully agreed to by the Mexican government.
Palmer, frustrated in his plans throughout the 1870's, fired Rosecrans as his representative and worked directly with the Mexicans himself, and through his own man James Sullivan. He was able to start work on the Mexican National Railway, of which he was the designer and pioneer builder, only during the 1880's.
The delay, occasioned by Rosecrans' failure to consummate a deal with the Mexicans, was to prove fatal to the cause of republican industrial development of Mexico. The real sponsor of Gen. Palmer's project within Mexico was Mattias Romero, Benito Juarez's ambassador to the U.S. There were, of course, Mexican opponents to the railroad development, who proposed, under blatant British influence, that Mexico "protect itself" from its northern neighbor by depopulating the entire area of northern Mexico, preserving it as a desert through which nothing could be transported!
But beyond this opposition, there was a very ugly, secret side to Rosecrans, which Juarez and other patriotic Mexican leaders probably suspected. This is revealed in a letter, never before published, written from Rosecrans in Mexico City to Secretary of State William Seward, dated Feb. 28, 1869. This was less than a week before the inauguration of President Grant, who would replace both Seward and Rosecrans.
In this letter, which we have copied from the State Department archives, Rosecrans called for the United States to intervene in Mexico in order to overthrow the government of Benito Juarez:
"The present Government of Mexico arrived here and assumed full control of Mexico nearly two years ago....What have they done? By refusing them Amnesty, they have lost the support of that very large and intelligent body of Mexicans compromised by supporting or acquiescing in the Empire [i.e. the European invasion and occupation, 1861-67], and have inspired them with hatred and ill will. They have persecuted the religion of the people[.] Churches whose charitable foundations for the support of schools, hospitals and worship had been confiscated...conscientious people have lost hope as well as confidence in their Justice....They have lost the confidence of all the foreign, and most of the Mexican capitalists and businessmen [Juarez still refused to put payment of foreign debts above the industrial development of his desperately poor people -- AHC], as well as the large property holders....The army is demoralized and discontented; public Justice notoriously retarded or corrupted; the public highways infested with robbers and kidnappers...."The late experience of European intervention having proven unsuccessful, and our friendship and trade offering more advantages to European nations than any likely to be derived from political intermeddling with the affairs of Mexico, the liberty and the duty of such intervention in its affairs as may be consistent with Justice, humanity, and our own interests, will not only have their consent, but will be urged upon us at no distant day.....
"The present government while apparently the legal representative, neither represents the intelligence, the conscience, the prosperity, or the business of the Nation...
"It is weak, vacillating, corrupt, and while of necessity appearing firmly [sic] to us it fears and secretly opposes the introduction of American Commerce, industry, population and enterprise, and will base its policy on the low passions and prejudices of the Mexicans, and has no firm intention of opening the country to emigration from the United States....
"Officers of the cabinet have advised public creditors to take small percentages on their claims as a full payment. Nor does the future promise better results....While the Government is staggering under the weight of pecuniary difficulties to meet ordinary expenses, all the claims of its domestic and foreign debt qre slumbering, even the interest unpaid. What hope [sic] in this cabinet to meet these impending obligations in which our citizens will soon be largely interested?
"Almost the entire foreign element here, the chief capitalists and large land owners, the Imperialists, and the conscientious Catholic, would be glad to have American intervention in any way, that would place the rule in their hands without bloodshed, robbery, and social overturn...."[emphasis added] [2]
The Drexel-Morgan partnership deliberately created the Panic of 1873 as an attack against what its European patrons viewed as dangerous American expansion of railroads and heavy industry. Other, more direct methods were also used to the same end.[3]
The Northern Pacific Railroad construction had stopped because of Jay Cooke's induced bankruptcy. But Gen. William J. Palmer's continuing mid-continent development program stood out as the boldest American effort, matching that other project of the Philadelphia Interests, Andréw Carnegie's Pittsburgh-area steelworks. Palmer's Denver and Rio Grande Railroad was building westward across the towering Colorado Rockies, and southward from Colorado Springs toward New Mexico; it proposed to continue through Albequerque and El Paso. Then Palmer's line from Mexico City would run up to El Paso, and across from Mexico City to the Pacific. Meanwhile Palmer's organization had begun opening Colorado coal fields, and his Central Colorado Improvement Company founded the town of South Pueblo in 1873, where Palmer would initiate the first iron and steelmaking complex in the American West.
During 1873 the financial group formerly known as the "Boston Concern" pushed its long moribund Atchison, Topeka and Santa Fe Railroad into action against Palmer, suddenly building across Kansas to Grenada just inside Colorado. Their plan was to physically block Palmer's further construction southward toward Mexico, and westward into the Rockies, while preventing his building rairoads in Mexico that might lead to industrial development there.
The Santa Fe Railroad was owned principally by John Murray Forbes and Thomas Jefferson Coolidge, members of the "Boston Concern" who had made their fortunes selling opium in China. They were backed financially by the Baring Brothers bank in England, sponsor of the world narcotics traffic throughout the nineteenth century. Coolidge's father Joseph had been paid $10 million per year by the Scottish firm Jardine and Matheson to run opium past the Chinese police. Forbes was also the leading organizer of propaganda for Specie Resumption, to replace Abraham Lincoln's government credit expansion policy with absolute credit control by the international banking syndicate.
A Santa Fe subsidiary line pushed through from Grenada to Pueblo, Colorado, in 1875. Palmer's efforts at this time were flagging due to the credit squeeze from the Panic. His D. & R.G. did not reach the area of the Colorado-New Mexico border until 1876. By June, 1877, trains were running across the summit of the Sangre de Cristo mountains at La Veta Pass, 9,300 feet above sea level, higher than anything built so far in Europe or North America. Palmer's famous narrow gauge road made this pioneering mountain construction possible.
Throughout the 1870's, the Boston and allied New York bankers waged financial war on Palmer's enterprise. They bought up his stock from the pinched Philadelphia investors. Eastern bondholders tried to close him down in May 1877, but Palmer managed to win refinancing of his debts.
The fireworks began early in 1878 on the Raton Pass, over which the Denver and Rio Grande intended to extend its line from Trinidad, Colorado, across into New Mexico. Officials of the Santa Fe saw that D. & R.G. men were on their way to Raton Pass, so they rushed a group of armed men to occupy the pass. When Palmer's men arrived they were unable to proceed with their work, and were forced to withdraw.
The D. & R.G. was preparing to build a line from Canon City, through the rugged canyons along the Arkansas River, up into the new booming mining town of Leadville. The Boston men learned of Palmer's intentions by, it is said, intercepting Palmer's April 18, 1878 telegram ordering out a construction crew. Officials and workers of the Santa Fe, heavily armed, deployed overnight to occupy Royal Gorge, just west of Canon City. When Gen. Palmer's crews reached the Gorge, they did not withdraw, but displayed their own weapons and took up positions opposite those of the Santa Fe.
With a physical stalemate, the parties entered into a long court battle over the right-of-way. Financial warfare against Palmer continued, however, particularly in pressure through stock market operations. By October, 1878, Palmer was forced to sign a 30-year lease giving operating control of all his existing lines to the Santa Fe. The unbuilt Royal Gorge line was not included, and the armed standoff there continued.
In June, 1879, Palmer won a writ from a Colorado court authorizing him to reposess his railroad. Not surprisingly, the Bostonians had not wished to operate a Colorado railroad at all, and had broken the lease contract by failing to maintain the D. & R.G., and charging rates that effectively prohibited any freight from travelling on it!
When the Bostonians baldly announced that the Colorado court had no jurisdiction in the case, and then stole the county seal with which the writ was to be stamped, Palmer's forces prepared to move. The Santa Fe complained that Palmer planned violence; according to D. & R.G. historians, the militia was actually called out but refused to budge against Palmer.
On the night of June 11, 1879, copies of the writ were distributed to sheriffs in towns throughout the state. Using his own armed men, and sheriffs who were willing to enforce the writ, Palmer seized all the rail lines, train stations, telegraph offices and work depots of the Denver and Rio Grande system. He travelled through the night on a special military command train.
The biggest fight occured in Pueblo. The Bostonians brought in Bat Masterson, marshall of Dodge City, Kansas, with a gang of thugs. Governor C.A. Hunt, a Palmer ally, marched into Pueblo at the head of several hundred of Palmer's coal miners to confront Masterson's gang. A posse of the Pueblo sheriff shot it out at the train dispatcher's office, and more Palmer troops arrived from Colorado Springs. By morning, the whole rail system was in Palmer's hands.
But the court battle went on inconclusively, In April, 1880, a "compromise" signed by Palmer and Santa Fe President Thomas Jefferson Coolidge was ratified in court. The D. & R.G. would not, for the next ten years, build south of Colorado, but Palmer would legally regain his line and could extend it within Colorado and to the west without Santa Fe interference.
Though the Bostonians had stopped Palmer's drive toward Mexico, he promptly used his new notoriety to raise $50 million to build up Colorado. In the three years 1879 to 1882, Palmer built 908 new miles of railroad within the state. In 1880 the South Pueblo Ironworks began operating a Bessemer steel plant and rolling mill; the first rails were produced in April, 1882. The Colorado Coal and Iron Company produced coal, iron ore, pig iron, steel and rails under Palmer's presidency until 1884.
The New York bankers who had refinanced his debts in 1877 renewed the financial war against Palmer in 1881 and 1882, finally taking control of the D. & R.G. board in 1883; Palmer and his associates were forced to resign. The bankers made no pretense of running a railroad. They squeezed it, took a strike in 1885, and delivered the company into bankruptcy. Palmer's Colorado Coal and Iron Company was eventually taken over by John D. Rockefeller as the Colorado Fuel and Iron Company, famous for its violent war with the labor force. No more industrial development on any important scale ever again took place in Colorado after Palmer passed from the scene.
Working with concessions granted to Gen. Palmer and his agent James Sullivan, the "Mexican National Construction Company" (a Colorado corporation) began building its line in Mexico under a May, 1881 contract for the "Mexican National Railway Company" (also a Colorado corporation). There was at this moment, as we will see shortly, a flurry of activity under a new American presidential administration committed to rapid progress throughout the Western Hemisphere.
By 1883, Palmer had completed rail lines stretching 255 miles north from Mexico City, and 235 miles south from Nueva Laredo, at the Texas border, to Saltillo. The line from the Pacific Ocean had progressed less than 30 miles when it was halted in November, 1882, for lack of funds.
Under the strain of continual financial warfare by the international bankers, Palmer had written in 1878 to his former assistant Edward H. Johnson, who was then Thomas Edison's business manager:
"Edison's last developments beat Aladdin completely. I always declared he could invent anything he wanted to. Give him my compliments, and tell him I wish he would discover for me some mode of building a railway to Mexico without money."[4]
While Palmer was strapped for cash, the Boston group struck in Mexico. From sympathetic parties in the Mexican governemnt, they took over the concession that had previously been granted to Palmer for a rail line from El Paso to Mexico City, forcing Palmer to commence his line from further east, at Nueva Laredo. The Bostonians also got the right to build a Mexico City-Pacific Coast line, generally following the original concession to Palmer.
Though Palmer had surveyed Mexico's rail lines from the beginnning, and had begun construction, he was, at last, completely stalled in Mexico and he was frozen out. His own Mexican National Railway Company was reorganized by British bondholders in 1886.
The lines he was building, and those of the Bostonians, were completed so far as he had mapped them out. The Mexican government took national control over the railroads early in the 20th century. But Palmer's planned use of the rail lines, for industrial development, was aborted in Mexico as it had been in the American Rockies.
Thomas Jefferson Coolidge, whose money had stopped Palmer's railroad from connecting Colorado and Mexico, founded the United Fruit Company in 1899. Coolidge combined Boston-British opium money and the muscle of New Orleans-based Russian immigrant mafiosi. His United Fruit was to carry out the plans of which the secessionist Knights of the Golden Circle had spoken only in secret, hushed tones. Under Teddy Roosevelt's manic glare, tropical countries would become giant plantations, but yielding bananas or coffee instead of cotton. They would not be permitted to follow the liberating example of the United States of America, though the U.S.A. then still remembered how it had recently fought its way to industrial greatness.
Before this tragic lapse in America's Promethean mission, the republican forces were to make one last great stand. The showdown would come in 1881.
Thomas Edison was moving heaven and earth, around the clock, to prepare the New York installation of the world's first electric power system. But on election night, in November, 1880, Edison arranged for a brilliant demonstration of the lights surrounding his Menlo Park laboratory, to celebrate the victory of James A. Garfield for President.
Garfield took office in March of 1881, with his chosen Secretary of State James G. Blaine. Abraham Lincoln had been murdered 16 years before, and the friends of Lincoln's nationalist program had struggled to keep the country going forward. Now, particularly with Blaine in Washington, the Americans were once again in the driver's seat in their own country. Europe, and Ibero-America, were tense with expectation.
James Blaine (1830-1893) was born and bred a Pennsylvania Whig. His great-grandfather, Col. Ephraim Blaine, was Commissary General for the Continental Army in Pennsylvania, and fought the cheapskates, thieves and traitors to sustain General Washington's starving army at Valley Forge.
James Blaine's father lived in Western Pennsylvania as a merchant from 1817 on. The family profited from the development of coal lands in the Pittsburgh area. James' mother's sister was married to Thomas Ewing, the renowned Whig Party leader over in Lancaster, Ohio; it was in this Ewing family that young James lived for two years, from 1841 to 1843, spent many other visiting months, and from which he derived his political identity.
As a U.S. Senator in 1836, Thomas Ewing got his stepson, William Tecumseh Sherman, into the U.S. Military Academy at West Point; James and the other children called the future general, "Gump." Blaine's Uncle Thomas Ewing was the Treasury Secretary for President William Henry Harrison in 1841, and was prepared to reinstitute the Bank of the United States when Harrison died mysteriously after a month in office. He was Secretary of the Interior under President Zachary Taylor beginning in 1849, but left when Taylor, likewise, died of a mysterious stomach ailment in 1850. The embattled nationalist politics and tradition of Henry Clay of Kentucky were the daily preoccupations of the Ewing and Blaine households, as they were with Clay's follower Abraham Lincoln in Illinois.
Blaine went to college in Kentucky, then moved to Maine. There as a journalist and congressman he fervently supported the war for the Union, while President Lincoln revived and expanded the nationalist policies of the too-soon-dead Harrison and Taylor. Lincoln's outright murder in 1865 profoundly shocked James Blaine, hardening his anti-British resolve. From 1869 to 1876, during the two terms of President Grant, Blaine was Speaker of the U.S. House of Represenatives.
By the 1870's Blaine was the main political representative of his fellow Pennsylvania pro-industrial republicans. He was the close friend of steelmaker Andréw Carnegie; of banker Jay Cooke; of Henry Carey's sidekick, ironmaster Joseph Wharton; and of Tom Scott, Union military railroad organizer and Pennsylvania R.R. executive. They all helped sponsor Blaine's career against the constant howlings of the London, Boston and New York financial communities.
Secretary of State Blaine, recongized as the national leader of the Lincoln Republicans, functioned as the de facto Prime Minister for President James Garfield. Blaine's political program was simple: The U.S. government would promote the development of industry and new technology; in the United States, by high tariffs and subsidies to American shipping; and throughout the Americas, by the construction of North-South railroads, the interoceanic canal, reciprocal trade agreements, and the protection of the hemisphere from imperialist Europe.
The entire hemisphere, from the U.S.A. down to the southern tip of South America, was all at once a theatre of battle, between the American industrial system and the plantation, or colonial system, as the American Civil War had been.
President Rafael Nunez of Colombia was denounced as "half a Yankee" by his opponents. Certainly the canal Ferdinand de Lesseps was building through Colombia's Panama state would benefit the Yankees, in particular their navy. And the U.S. did play a great role in the construction effort -- all the mechanics were Americans, and most of the laboreres were English-speaking blacks, from Jamaica and from the U.S. But with the world commerce that should soon throng to Colombia, Dr. Nunez planned to make his country an industrial power. The government must build railroads to unify the traditionally isolated mock-sovereign states of the Columbian federation. He had already created a national bank on the model of Hamilton and Colbert. Tariffs and trade alliances with neighboring countries would be used as weapons to develop native industry.
The canal construction crews arrived in 1881 under the watchful eye of the British consul in Panama, Claude Coventry Mallet -- of that marvelous clan of British-Swiss master spies who created Aaron Burr, the Scottish Rite and other anti-Hispanic adventurers. The British oligarchs and their friends struck Colombia with fury over the next several years. Financial sabotage by the international bankers magnifified the Canal Company's difficulties with malaria and yellow fever. Colombia's Liberal Party directed an insurrection against President Nunez, led by Free Trade advocates such as the Samper family -- still politically prominent today in the person of narcotics banker Samper Pisano. They invoked the "states rights" doctrine that Nunez had heard from the slaveocracy in the U.S.A., and they likewise threw Colombia into civil war.
During 1885 terrorist mobs, under the thin cover of "anti-centralism", attacked and burned canal construction centers. President Nunez had allied his faction to the Conservative Party to fight the war. By his bitter victory, Nunez was able to proclaim a unified nation, the Republic of Colombia, under a new constitution which has lasted exactly 100 years to the present time.
But the French-led canal effort was crippled. At the 1886 ceremonies dedicating the Statue of Liberty, a gift from the French to the American people, Ferdinand de Lesseps reminded his audience that his father had made the first commercial treaty between the two allies more than a half century before. But there was "nobody home" in Washington, no one who could respond to a plea for aid in the failing republican project. The United States had already effectively lost control of its government -- it had been shot away, in combat in Peru.
There was one rail system in the world higher than William Palmer's Denver & Rio Grande. It traversed the mountain spine of the hemisphere about 3,500 miles southeast of Colorado, in the Peruvian Andes. Engineer Henry Meigs had come down from California to build the breathtaking lines for the Peruvian government in the 1860's and 1870's; the Central railroad crossed the Andes at 15,865 feet.
The great industrial potential of the region was thus just beginning to be developed, when Peru and Bolivia were invaded by the armed forces of Chile, a client state of Great Britain. The ostensible purpose of the Chileans and their British backers in this War of the Pacific was to grab the southern provinces of Peru, and Bolivia's narrow corridor to the sea. This land was rich in nitrate and guano deposits valuable for fertilizer.
The war aims of the invaders, however, soon emerged as nothing less than the destruction of the Peruvian nationality. Like Colombia, and like the ill-fated Paraguayans back in the 1860's, Peru had dared to aim for national industrial development -- with help from those meddlesome Americans.
When the Garfield-Blaine administration started in 1881, Peru had been utterly defeated. Chilean troops occupied the entire coast and had taken Lima in January.
The British-led foreign diplomatic community -- including the U.S. ambassador, Isaac Christiancy -- clamored for Peruvians to accept the inevitable, that they should cede their nitrate provinces, and agree to whatever terms the conquerors imposed. The British recognized a self-appointed dictator named Pierola as a Peruvian head of state, but no constitutional government.
The Peruvian army had disintegrated, which may have had as much to do with treason as with the respective military abilities of the Peruvians and the Chileans. The false-flag W.R. Grace company had served as chief supplier and military advisor to the Peruvian government, while a "pacifist" party in Peru had demobilized and demoralized the country.
With hindsight and the resources of history we are in perhaps a better position today, than were the Peruvians a century ago, to know the precise identity of the W.R. Grace and Company. The Grace family published a lavishly decorated book [5] in 1911, to honor their own wealth and noble lineage. They claim descent from important females going back to 600 A.D. [sic], and importent males back to 1000 A.D.
The family had long served the British as overlords, of the Catholic persuasion, over a section of the peasant population of Ireland. Along came Oliver Cromwell's 1640's revolt against the British crown, and the Grace's estate was taken from them. Some of the menfolk who had fought "the damned republicans" went wandering in Continental Europe, aiding the Catholic Hapsburgs and the exiled Stuart family with newly learned arts of intrigue and cultish underground organization.
With the Restoration the Graces were back in clover, but only temporarily. The "Glorious Revolution" of 1688 put Catholics in disfavor. Still threatened with dispossession, the head of the Grace family sought help from his cousin, the Duke of Buckingham. "See here, old chap, there are Catholics...and there are Catholics..." The Duke understood just what Grace meant, and went to plead his case in the House of Lords. This left his visiting cousin alone in Buckingham Palace (this was before it was bought as a residence by King George III) with the Duke's young daughter, who was promptly impregnated. When the Duke discovered the facts, he evicted Grace and dropped his case.
In this frankly humiliating fashion, the Grace family lost some 38,000 acres of choice Irish land and any reputation in Polite British Society. They were forced to readopt the mercenary ways of exile. Indeed, they made a growing fortune as attornies, as landless merchants, and as secret intelligence agents. But their family tradition nourished a hatred against the republican rabble and others who had wronged them, and a burning ambition to recover the noble, ordered world of the past.
William Russell Grace (1832-1904) arrived in Peru with his father, James, in 1851. They brought along 200 Irish servants to work sugar fields. William and his brother Michael used family contacts to develop Grace Brothers & Company into the major British trading firm in western South America. They controlled virtually all shipping on the Pacific Coast, and in coordination with bankers in Lima, Santiago and London, they were the pivot on which rested British political power in the region.
In 1865, after the Americans fought their way back from the British-supplied Southern Rebellion, William Grace established a residence in New York City. He organized W.R. Grace & Co. as a branch of his family's British firm in Peru and London. In 1879 his allies John M. Forbes and the Morgan-Rothschild banking syndicate forced Specie Resumption on the Americans, to squeeze off their credit. Then in 1880, without displaying even a hint of embarrassment, William R. Grace ran for Mayor of New York. Some troublemakers brought up a potential conflict in that "the pirate of Peru" did not appear to be an American citizen. [6] But Grace was in fact elected mayor when Garfield was elected President!
It was into this badly deteriorated situation that Secretary of State James Blaine resolved to intervene with American power. He sent, as minister to Peru, a man in whom he reposed absolute trust. Stephen Augustus Hurlbut had been a political fellow warrior by the side of Abraham Lincoln in Illinois from at least the time of the state Whig convention of 1847. Hurlbut had fought valiantly as a Union general throughout the Civil War[7]. He had served as the first national president of the Grand Army of the Republic, the Union veterans organization, as Grant's ambassador to Colombia, and as a Republican congressman.
Stephen Hurlbut, in short, was not a professional diplomat, and cared little about the opinions of enemies of his country. When, in early May, 1881, Secretary Blaine designated Hurlbut to go to Peru, his intentions were obvious to his opponents. On May 23, 1881, Charles J. Guiteau sent a letter to President Garfield:
"...Mr. Blaine is a wicked man, and you ought to demand his immediate resignation; otherwise you and the Republican party will come to grief."[8]
Guiteau shot President Garfield in the Washington train station on July 2, 1881, 4 months after he had taken office. The President did not immediately die, however, and as he lingered, Stephen Hurlbut arrived at his post in Peru.
What is known about Guiteau may be quickly summarized. [9] His father was a devotee of the famous communist cultist John Humphrey Noyes. In 1860, instead of going to college, Charles was sent to Niagara Falls, Canada, and was escorted into the commune run by Noyes in Oneida, New York. Here Guiteau was brainwashed for the entire duration of the Civil War, emerging in 1865.
John Noyes was a sadist, the son of a Tory Federalist Congressman from New Hampshire who sided with the British during the War of 1812; the Noyes fmaily were notorious in Massachusetts during the Revolution as British loyalists, resentful enemies of American independence.
The commune in which Charles Guiteau was destroyed was run on the following lines. All wives were common sexual property, and all sex acts were the subject of official community "criticism" sessions in which each individual was in turn ripped up by his shared mate. John Noyes personally sexually initiated the children of the commune's inmates. Murder was perhaps not a spectacular crime to Oneida graduates, since at their seances they learned that people do not really die after all.[10]
Guiteau's mindbenders were one group among a number of similar operations superintended by Laurence Oliphant, a top British intelligence officer who came to reside on another cult commune in upstate New York toward the end of the Civil War. Coming from service in insurrections throughout urope, and a stint as subcommander of the 2nd Opium War against China, Oliphant had responsibility for recruiting those likely to aid in the "reform of America's corrupt political life;" one of his more famous recruits had been the cynical historian Henry Adams, back in London.
Oliphant conducted his seances, worked with the Western Union organization, and established a vast array of American political and commercial contacts, while Charles Guiteau wandered about, brainless, in the criminal subculture, doing as his "inspiration" directed. Guiteaus's inspiration to murder the president, he told the court, came to him on May 18, 1881.
Upon arriving in Lima, Stephen Hurlbut[11] announced that the United States of America recognized Garcia Calderon as the constitutional president of Peru. He wrote back to Blaine that he would not be following the "questionable habit" of his predecessor, "of calling together the diplomatic corps, and taking counsel on almost all questions, which practically emascualted the United States." The British, in particular, were howling that Hurlbut was "breaking ranks" by recognizing a government that they didn't recognize. Hurlbut immediately set about strengthening national resistance to the invasion, and support for Calderon, who had been chosen by the underground Peruvian nationalist leadership.
Soon after his arrival, Hurlbut sent a memorandum to the Chilean commander, Admiral Lynch, stating that the U.S. would not look kindly upon the breaking up of Peruvian territory. Lynch immediately took this memo to the British and French ambassadors, and two hours later the ambassadors went to see President Calderon -- whose government they had not recognized. They told Calderon that, using their good offices, the Chileans might be persuaded to withdraw, without demanding the cession of territory.
Hurlbut had in fact given a copy of the memorandum to President Calderon as well as to the Chilean commander, so Calderon was able to see the sequence of events and to laugh at the British, who until the Americans butted in had insisted that Peru must surrender its territory.
President Garfield died on Sept. 19, 1881. Hurlbut wrote back to Blaine for instructions. Blaine said only that Hurlbut should persist in the recognition of Calderon. Hurlbut persisted. Enraged Chileans reported that Hurlbut used the U.S.S. "Alaska" to land a brother of President Calderon in Mollendo, with money and instructions for Peruvian resistance fighters. [12] He criticized and counteracted the unwholesome situation in the U.S. legation in Chile: the American ambassador there, Judson Kilpatrick, was mortally ill, and his wife, the daughter of a Chilean government official, represented "American" policy on behalf of the Chileans and British. The Chilean military, meanwhile, arrested Peruvian President Calderon and took him away to Santiago.
On November 29, 1881, Secretary Blaine, still in office, called for a peace conference of all republics in the Western Hemisphere, to convene in Washington one year later. This was the last important exposition of the Monroe Doctrine, representing the thinking of both murdered American presidents with whom Blaine had been associated.
Ambassador Hurlbut had discussed with the Peruvians the establishment of a coaling station at Chimbote for American naval vessels. He wrote to Blaine on Dec. 7, 1881:
"Sir Spencer St. John the English Minister is behaving very singularly and indecorously in these affairs. He learned the other day in a very vague form, something about the Chimbote Protocol, and has proceeded to the singular length of writing out the points of a 'Secret Treaty' between the United States and Peru, which he is exhibiting in clubs and other public places and which he induces people to believe is genuine."In the same spirit he has induced the Chilean authorities to believe or to affect to believe that a 'Secret Treaty' of vast importance has in fact been executed, giving in ownership to the United States the entire bay of Chimbote, and some square miles of territory, and the Rail Road with exclusive civil and military jurisdiction and power to erect fortifications, besides many other exclusive privileges."
Hurlbut wrote to Blaine on Dec. 11, 1881:
"In my last [dispatch] I mentioned the extraordinary conduct of Sir Spencer St. John the British Minister. I have learned since that time that the Chilian government has acted upon this information, and that they have telegraphed to their several Diplomatic agents in America and europe in accordance with the false and exaggerated information furnished them from that source. I am also informed, though I scarcely believe it, that the English, French and Italian ministers here, have given like information to their respective governments. The purpose of these communications is to give color to the idea of annexation or at least protectorate [i.e. over Peru] on the part of the United States."Stimulated undoubtedly by this same information, the Chilian Military authorities of this city made a domiciliary visit to the house of Mr. Calderon, occupied by his wife and family, and instituted a severe but ineffectual search for the alleged Treaty. They arrested Mr. Velarde, one of Calderon's late ministers, and demanded a literal copy. Mr. Velarde stated that he had no such document in his possession. They then pressed him to ask for a copy from me....
"Having made up my mind that all this came from the indiscreet and indecent action of Sir Spencer St. John, I addressed him an official note...dated 9 Dec. 1881. This note was sent to him at 8:30 A.M. [Dec. 10] and at 10:30 A.M. he came to my house, and we had the interview, a statement of which I enclose....It is apparent that his sole object was, to make mischief and create an ill feeling throughout America and in Europe against the United States."
The note to St. John read, "I have been informed by several gentlemen of good standing that for some time past, you have exhibited in places of public resort a supposed version of an assumed treaty between Peru and the United States....I request you to admit the representative of the United States into the confidence, you have so liberally bestowed upon the public, and to furnish me a copy of the version alluded to...."
Describing the visit of the British ambassador:
"Mr. St. John came to my house and stated. That he had just received my letter. That he had shown to several persons a draft of a supposed treaty, which he himself had noted down, consisting of six articles. That he had done it as a joke to show the credulity of the Peruvians by embodying in form the rumors currently on the streets. That it was never intended to be serious, and that he had so informed every one to whom he had shown it. That the propositions were so absurd that he never supposed any one would believe them. That he had destroyed the paper and consequently could not give me a copy."
On Dec. 12, 1881, James Blaine was fired as U.S. Secretary of State. His replacement, Frederick Frelinghuysen, immediately cancelled the proposed hemispheric peace conference, to which many nations had already enthusiatically responded, on the grounds that it would invite "European jealousy and ill will"! Blaine later wrote an open letter to President Arthur: "If that movement [for a hemishperic peace congress] is now to be arrested for fear it may give offence in Europe, the voluntary humiliation of the United States could not be more complete, unless we should petition European Governments for the privilege of holding the Congress."[13]
Representative Perry Belmont arranged for a special Congressional investigation, chaired by himself, to investigate the supposed corruption of James Blaine and Stephen Hurlbut. He said he had been slipped revealing information to this effect by the Peruvian ambassador to Washington.
Congressman Belmont's father, banker August Belmont, reflected the British "joke" about America trying to rob Peru, and remarked with relief: "the country might have been plunged into a war with Peru if poor Garfield had not been assassinated. Blaine is about the most unscrupulous politician we ever had since Aaron Burr." [14]
August Belmont was the official American representative of the Rothschilds, and had been the consul general of the Hapsburgs in America. His son Perry was the law partner of George Frelinghuysen, the son of the new Secretary of State. Without blushing, they had their law office in August Belmont's bank building.
Stephen Hurlbut was supposed to testify at Congressman Belmont's hearing, which might have blown out some circuits. But a letter arrived in Washington from U.S. Naval personnel in the U.S. legation in Lima, dated March 28th, 1882:
"A Post-Mortem has this day been held upon the remains of Stephen A. Hurlbut, Envoy Extraordinary and Minister Plenipotentiary of the United States of America in Peru....[The] slight organic lesions, the only ones found, do not of themselves prove the cause of death; but in connection with the symptoms which preceded death...satisfy us that Stephen A. Hurlbut, died suddenly at the American Legation, Lima, Peru, on March 27th 1882, and that the cause of death was Angina pectoris."Former Secretary of State James Blaine testified at Belmont's Congressional hearing:
"The Chilian Government has put up by advertisement 1,000,000 tons of guano, which I suppose is worth $60,000,000 in Liverpool and they pledge themselves in the advertisement to pay one-half of it into the Bank of England for the benefit of the English bondholders who put up the job of this war on Peru. It was a put-up job; that is all there was to it; it was loot and booty. It had not as much excuse in this as Hastings and Clive had in India, and England sweeps it all in....The iron-clads that destroyed the Peruvian navy were furnished by England....It is a perfect mistake to speak of this as a Chilian war on Peru. It is an English war on Peru, with Chili as the instrument, and I take the responsibility of that assertion. Chili would never have gone into this war one inch but for her backing by English capital, and there was never anything played out so boldly in the world as when they came to divide the loot and the spoils."[15]
James Blaine was the Republican nominee for President in 1884. New York Mayor W.R. Grace organized the support of the financial community for Blaine's successful opponent, Grover Cleveland. Young Theodore Roosevelt followed the advice of Henry Cabot Lodge and stayed a Republican, so he could help defeat Blaine from within the Party.
The broken government of Peru signed the Grace-Donoughmore Contract in 1890. English bondholders, legally represented by former New York Mayor W.R. Grace, secured a mortgage on the nation of Peru. In exchange for their bonds, they "received outright the silver mines of Cerro de Pasco; the entire output of the guano deposits; five million acres of land containing valuable oil and mineral deposits; as well as the lease of two railways for sixty six years..." [16] No more railroads were ever built in Peru. The southern provinces were annexed by Chile. Peru has remained in poverty, hostage to W.R. Grace and Co. and allied banking interests.
Vice President Theodore Roosevelt became President of the United States upon the assassination of William McKinley in 1901, six months after McKinley and Roosevelt were elected. He reversed all the policies of American republican leaders going back to George Washington. He made war on Ibero America, and closed the American West to further settlement.
Rafael Nunez of Colombia had learned from Abraham Lincoln's battle for the Union, that his nation must be unified for survival. President Teddy Roosevelt, whose family had helped lead the slaveowners' rebellion against the United States, hired a pretend insurrection, for the secession of Colombia's Panama State. His "Corollary to the Monroe Doctrine" spit on the graves of Blaine, and Hurlbut, and Lincoln, and the Americans who died for freedom in the Civil War; T.R. declared that the U.S.A. would enforce debt collections for international bankers, including Grace and his bank -- now known as Citibank.
In response to Peruvian President Alan Garcia's defiance of the International Monetary Fund, the Washington Post of August 21, 1986, editorialized that:
"Peru's current economic decline is a case of bad luck compounded by bad management....The present foreign debt crisis is Peru's eighth since the early 19th century." On the same page, they reproduce a message from the State Department: "Because many Latin Americans have an emotional need to cast stones at foreigners, the myth of imperialist exploitation has grown over the years to extraordinary proportions. Powerful foreigners are thought to be tirelessly scheming to impoverish and subjugate Latin America."
For a long time the Post treated its readers to the campaign of William Russell Grace's grandson, current W.R. Grace President Peter Grace, to cure America's budget deficit with killer austerity. Grace was the "tirelessly scheming" author of the nightmare Gramm-Rudman law, which in today's economic crisis will blow up the U.S.A. like a hydrogen bomb if it is not reversed.
Americans are ready to take back control of their own affairs from the Eastern Liberal Establishment, from Teddy Roosevelt's Trust. It is a nation worth fighting for. It is an idea of the freedom to develop, a global concept which may not in fact be realized until America is once again in American hands.
This letter is in the microfilmed file of the U.S. legation in Mexico, in the Archives of the United States, Washington, D.C.
The account provided here of the Colorado railroad war is taken from Fisher, John S., A Builder of the West: The Life of General William Jackson Palmer, The Caxton Printers, Caldwell, Idaho, 1939; and from the Colorado Springs Gazette, commemorative editions from 1901 through 1909, and other newspapers, whose coverage of Palmer is contained in the Palmer Papers microfilm by the Colorado Historical Society which is on deposit in the Pennsylvania State Library, Harrisburg.
Palmer, writing from the President's Office of the Denver and Rio Grande Railroad, 216 S. 4th St., Philadelphia, to E. H. Johnson, March 8, 1878; in the Edison National Archives, West Orange, New Jersey.
The Family of Grace, London, K. Paul, Trench, Trubner, 1911, a copy of which is in the Library of Congress, Rare Book division.
See the New York Times, various editions in September and October, 1880. Grace said nothing on his citizenship, but the Times thought the matter was settled by the fact that Grace had briefly visited New York many years earlier, as a teenager.
We are reliably informed that Gen. Hurlbut had in his command, in the Sixteenth Corps, Army of the Tennessee, the loyal and efficient services of Private James Avery Benton, great-great-grandfather of Mr. Nicholas Benton, the current director of the Washington D.C. office of this newspaper.
From the printed copy in the Garfield papers, Library of Congress, excerpted in Peskin, Allan, Garfield, Kent State University Press, 1978, p. 591.
See United States of America vs. Charles J. Guiteau, 1881, Library of Congress.
Estlake, Allan The Oneida Community: A Record of an Attempt to Carry Out the Principles of Christian Unselfhishness and Scientific Race-Improvement, London, Geroge Redway, 1900.
See the correspondence from the American legation in Peru to the Secretary of State, August, 1881 to March, 1882, on microfilm in the Archinves of the United States.
The Valparaiso Times of December 24, 1881, reported in Millington, Herbert, American Diplomacy and the War of the Pacific, New York, Octagon Books, 1975, p. 93.
Quoted in Hamilton, Gail, Biography of James G. Blaine, The Henry Bill Publishing Co., Norwich, Conn., 1895, p. 521. This is the only decent biography of Blaine, written by his neice -- at whose Washington house Thomas A. Edison first demonstrated the phonograph to the assembled U.S. Congressmen.
Quoted in Black, David, The King of Fifth Avenue; The Fortunes of August Belmont, The Dial Press, New York, 1981, p. 645.
Sketch of William Russell Grace, Dictionary of American Biography, Charles Scribner's Sons, New York, 1931. The very same article declares that Grace "conducted a reform administration" as mayor of New York.
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