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Thursday, June 30, 2011


June 29, 2011

Rape, Mercenaries, And Bloodbaths On The Scale Of Yemen?
The Media CENSOR Amnesty's Failure To Find Evidence In Libya

In the Independent on June 24, Patrick Cockburn reported a vital development countering official propaganda on Libya:

'Human rights organisations have cast doubt on claims of mass rape and other abuses perpetrated by forces loyal to Colonel Muammar Gaddafi, which have been widely used to justify Nato's war in Libya.

'Nato leaders, opposition groups and the media have produced a stream of stories since the start of the insurrection on 15 February, claiming the Gaddafi regime has ordered mass rapes, used foreign mercenaries and employed helicopters against civilian protesters.'

Amnesty and Human Rights Watch (HRW) have checked the claims and found flat zero evidence.

And yet, earlier this month, the prosecutor of the International Criminal Court, Luis Moreno-Ocampo, told a press conference: 'we have information that there was a policy to rape in Libya those who were against the government. Apparently he [Colonel Gaddafi] used it to punish people'.

Last week, US Secretary of State Hillary Clinton said she was 'deeply concerned' about reports of widespread rape in Libya by Gaddafi's forces.

By contrast, Donatella Rovera, senior crisis response adviser for Amnesty, who spent three months in Libya after the start of the uprising in February, said: 'we have not found any evidence or a single victim of rape or a doctor who knew about somebody being raped'.

Liesel Gerntholtz, head of women's rights at HRW, said of the rape claims: 'We have not been able to find evidence.'

The Amnesty investigation also found no evidence of mercenaries fighting for Gaddafi. Rovera commented:

'Those shown to journalists as foreign mercenaries were later quietly released. Most were sub-Saharan migrants working in Libya without documents.'

And what about the massacres? Cockburn writes:

'During the first days of the uprising in eastern Libya, security forces shot and killed demonstrators and people attending their funerals, but there is no proof of mass killing of civilians on the scale of Syria or Yemen.'

Not quite the impression given by the flood of media propaganda.

Cockburn followed up his June 24 piece with another excellent report on June 26: 'Don't believe everything you see and read about Gaddafi.'

At time of writing, there has been a single low-profile response to Cockburn's reports in Roy Greenslade's Guardian blog.

Greenslade quoted Cockburn, adding only that these findings of course do not mean that Gaddafi's forces have not committed crimes.

There have been no other mentions in the UK media that we can find of this credible information challenging key claims justifying the war on Libya.

But shouldn't a media system that so eagerly advanced these claims against the latest target of Western violence be equally willing to publicise counter-evidence?

Media Performance – The 'Gut-Churning Atrocities'

For once, let's sample from the performance of The Sun, which hosted a piece by TV celebrity and chat show host Lorraine Kelly:

'Of all the gut-churning atrocities to come out of Libya, the use of mass rape as a weapon of war is the most horrific.

'Over the years despot Gaddafi has been accused of many heinous crimes. But now he has been charged with procuring container loads of Viagra-like pills which are given to his troops so they can rape their victims more "efficiently".

'The thought of civilians being terrorised by troops on drugs who are being positively encouraged to rape is utterly monstrous and chills the blood.'

Amnesty's Rovera noted that rebels meeting with the foreign media in Benghazi showed journalists packets of Viagra, claiming they came from burned-out tanks. Cockburn commented 'it is unclear why the packets were not charred'.

The Daily Mail and numerous other media repeated the same claims ad nauseam.

A leading article in the Guardian expressed some caution in mentioning the presence of mercenaries on February 21:

'If the widespread reports of African mercenaries being used to shoot Libyans are accurate, he has few qualms about mowing down his own people.'

The caution had vanished from a leading article on March 10: 'air activity is not the deciding factor in the firefights between the rebels and regime loyalists and mercenaries'.

The Times went even further, claiming that Gaddafi depended on mercenaries: 'his regime imposes ever greater atrocities against Libya's people (not, incidentally, "his" people, for he leads no legitimate government and relies on foreign mercenaries)'. (Leading article, 'Essence of Indecision,' The Times, March 4, 2011)

A leading article in the Independent, Cockburn's own paper, observed on February 21:

'Colonel Gaddafi is said to have deployed heavy weapons and African mercenaries in an effort to reassert his rule.'

Cockburn wrote on the alleged mercenaries: 'The Amnesty investigation found there was no evidence for this.'

On the use of 'heavy weapons', there was also 'no evidence that aircraft or heavy anti-aircraft machine guns were used against crowds. Spent cartridges picked up after protesters were shot at came from Kalashnikovs or similar calibre weapons'.

Rovera commented:

'The politicians kept talking about mercenaries, which inflamed public opinion and the myth has continued because they were released without publicity.'
No Lessons Learned (Again!)

It ought to be surprising that Amnesty and Human Rights Watch exposed US-UK propaganda in a way that the entire pack of Western media hounds was unable or unwilling to do. But as we have described many times, with rare exceptions, journalists function as stenographers to power. Arguably, as democracy has rapidly eroded in Britain – with all main political parties increasingly serving the same privileged interests – journalists have become even less inclined to challenge the powerful.

The tales of mass rape and vicious mercenaries recall the infamous claim in 1990 that Iraqi soldiers had stormed a Kuwait City hospital, taken hundreds of babies out of incubators, and left them to die on the floor. Journalist John MacArthur, author of The Second Front: Censorship and Propaganda in the 1991 Gulf War, commented:

'Of all the accusations made against the dictator [Saddam Hussein], none had more impact on American public opinion than the one about Iraqi soldiers removing 312 babies from their incubators and leaving them to die on the cold hospital floors of Kuwait City.'

In their book, Toxic Sludge Is Good For You, John Stauber and Sheldon Rampton described how the most powerful testimony came from a 15-year-old Kuwaiti girl, initially known only as Nayirah:

'Sobbing, she described what she had seen with her own eyes in a hospital in Kuwait City... "I volunteered at the al-Addan hospital," Nayirah said. "While I was there, I saw the Iraqi soldiers come into the hospital with guns, and go into the room where... babies were in incubators. They took the babies out of the incubators, took the incubators, and left the babies on the cold floor to die."'

In fact, Nayirah was a member of the Kuwaiti Royal Family. Her father was Saud Nasir al-Sabah, Kuwait's Ambassador to the US. Stauber and Rampton noted that Nayirah had been coached by US PR company Hill & Knowlton's vice-president Lauri Fitz-Pegado 'in what even the Kuwaitis' own investigators later confirmed was false testimony'. The story of the 312 murdered babies was an outright lie.

Needless to say, the mainstream media have learned nothing from this and numerous similar cases.

However appalling media performance has been in facilitating yet another bloody war on yet another defenceless country - just a few years after the great Bush-Blair deception on Iraq - the failure of the media to report Amnesty and HRW's claims is almost beyond belief. These are highly credible sources making highly controversial claims (which means they will have been extremely careful to check their facts) about alleged crimes that have been used to help justify war. And the media have responded with a single mention in a blog.

It seems oddly appropriate, as we approach our ten-year anniversary next month, that we should be witnessing one of the most striking examples of media servility to power we have seen.
Libyan Oil does need much refining. It is of the highest quality.

The goal of Media Lens is to promote rationality, compassion and respect for others. If you do write to journalists, we strongly urge you to maintain a polite, non-aggressive and non-abusive tone.

Ask the following editors and journalists why they have not reported Amnesty and Human Right Watch's failure to find evidence of rape, use of mercenaries, use of heavy weapons against civilians, and mass killing on the scale of Yemen and Syria, in Libya:

Write to Guardian editor Alan Rusbridger


Write to Simon Kelner, Independent editor-in-chief


Alex Thomson at Channel 4 News

Sunday, June 26, 2011

WORKING ON IRANIAN NUKES, now they are dead. Israeli media report happily
Israeli newspapers have further identified those scientists as contractors who had worked on Iran's Bushehr nuclear energy facility.!/image/2358286532.gif_gen/derivatives/default/2358286532.gif

Nuclear experts killed in Russia plane crash helped design Iran facility

The five Russian scientists were among 44 killed earlier this week; no official investigation of foul play has been opened, though Iranian nuclear experts have in the past been involved in similar accidents.

"The State Atomic Energy Corporation ROSATOM and our subsidiaries had suffered a great loss," the Russian agency said on its website Wedneesday. "Five senior staff from three of our subsidiary enterprises were among the 45 people who died in a plane crash in Russia's north-western republic of Karelia on 20 June.

The RusAir Tupelev-134 passenger jet, which took off from Moscow's Domodedova airport, crashed on approach to the Petrozavodsk airport late Monday, killing 45 of the 53 passengers and crew members aboard.

Among the dead were the following scientists employed at Rosatom subsidiaries: Sergey Ryzhov, director and general designer of OKB Gidropress; Banyuk Gennady Fedorovich, deputy director and chief designer of OKB Gidropress; Nikolai Trunov, head of department and chief designer of OKB Gidropress; Andrei Trofimov, chief technologist of OKBM Afrikantov;  and Valery Lyalin, head of the technology department of AtomEnergoMash.

"The five nuclear experts killed in a plane crash in northern Russia earlier this week had assisted in the design of an Iranian atomic facility," Israeli newspaper Haaretz reported Thursday, citing security sources in Russia.

"The experts ... worked at [Iran's] Bushehr [nuclear power facility] after the contract for the plant's construction passed from the German Siemens company to Russian hands" in 1995, the Haaretz report continued. "The five were employed at the Hydropress factory, a member of Russia's state nuclear corporation, and one of the main companies to contract for the Bushehr construction."

Russia foreign policy analyst Igor Danchencko, who worked in Iran several years ago, said many Russian scientists worked at Bushehr. "Naturally, the leadership of Gidropress was involved," Danchenko, previously with the Brookings Institution, told the Envoy by e-mail Friday. "They design or contribute to the design of all newer Russian reactors."

The plane crash "is a major loss, but not a setback for Russian nuclear power," Danchenko continued. As for Iran's Bushehr, he added, the Russian experts have basically "completed their work there, as far as I understand. Iran could operate the plant on its own from now on if it had enough fuel."

German's Siemens Corp. began construction of the Bushehr nuclear power facility in 1975, but broke off work in 1980 after the United States imposed an arms embargo on Iran. In 1995, Iran contracted with Russia to finish the facility, but its completion has been delayed for more than a decade. Iran announced last October that the plant was about to go online to produce power, but later had to remove fuel rods out of technical and safety concerns.

Iran's atomic energy chief Fereydoun Abbasi met with his Russian counterpart on the sidelines of a nuclear safety conference at the International Atomic Energy Agency in Vienna on Tuesday. Abbasi used the occasion to announce the Bushehr power facility was proceeding on schedule with a planned August launch, and that safety concerns with the facility had been satisfactorily addressed.

"After loading the fuel [into the reactor], the Russians were also doubtful that a problem might have occurred, and the so-called minor breakdown in the equipment led both sides to decide to remove the fuel from the core of the reactor, recheck it, and put it back into the core [of the reactor]," Abbasi said, according to Iran's Press TV.

Israeli newspaper Haaretz reported Thursday that intelligence sources considered Abbasi involved with alleged Iran nuclear weaponization research, and said he had been the target of an earlier unsuccessful assassination attempt. Iran blamed Israel's intelligence service Mossad for being behind a campaign of assassinations of suspected Iranian nuclear scientists.

Russia plane crash

The wreckage of Tu-134 plane, belonging to the RusAir airline, is seen on a highway near the city of Petrozavodsk Tuesday, June 21, 2011.

Photo by: AP

The cause of this week's plane crash, a kilometer from the runway at Petrozavodsk airport in Russia's northwest Karelia province near Finland, is being investigated. Early reports suggested  that investigators were examining pilot error, mechanical problems with the aging Tu-134 aircraft, as well as fog and weather issues. Russia has since announced it will phase out the fleet of aging, Soviet era Tu-134 aircraft.

Also among those killed were a family of four with dual Russian-American citizenship. Alexander Simanov and his wife Lyudmila Simanova, originally from Petrozavodsk, ran a software company in Weston, Florida. They and their two young daughters, Yekatarina "Katya" and Yelizaveta "Liza" Simanova, were being mourned by teachers, schoolmates and friends in their community near Ft. Lauderdale, Florida, local media reported.

(Russia's state atomic energy corporation Rosatom identified five scientists employed by its subsidiaries as having died in a plane crash Monday. Among them (l to r): Sergey Ryzhov, Gennady Banyuk and Nikolay Trunov. Via the Daily Mail.)

The RusAir Tu-134 passenger jet on which they were travelling was bound for Petrozavodsk airport from Moscow, but crashed onto a road about one kilometre from its destination.

Rosatom mourns workers in jet crash
21 June 2011
Russian state nuclear company Rosatom reported that five senior staff from three of its subsidiary enterprises were among the 44 people who died in a plane crash in Russia's north-western republic of Karelia on 20 June. The RusAir Tu-134 passenger jet on which they were travelling was bound for Petrozavodsk airport from Moscow, but crashed onto a road about one kilometre from its destination. The airport was reportedly shrouded in fog at the time of the accident. Just eight of the 52 people on board survived the crash. Rosatom said that among those killed were three employees of Podolsk-based nuclear power reactor design and nuclear engineering organisation OKB Gidropress: Sergey Ryzhov, director and general designer; Banyuk Gennady Fedorovich, deputy director and chief designer; and Nikolai Trunov, head of department and chief designer. Andrei Petrovich Trofimov, chief technologist of Nizhny Novgorod-based machinery engineering bureau OKBM Afrikantov, and Valery Lyalin Filippovich, head of the technology department of AtomEnergoMash - the engineering division of Rosatom - also died. Rosatom said that it and its subsidiaries had "suffered a great loss."

Monday, June 20, 2011

Leuren Moret MOLECULAR WEAPON at 911 WTC

9/11: Energy budget and molecular dissociation of the World Trade Center (WTC) by Independent scientist Leuren Moret
see it dissolve ... like alka seltzer

BERKELEY, CA - Sound science is the only approach to understanding what happened at the WTC on 911.  The energy budget of molecular dissociation required to "disappear" two tall buildings as they collapsed is the answer to what happened on 911 at the WTC.  Until the energy budget is addressed, which would be required to turn two buildings into nanoparticles (which are invisible and are permanently suspended in the atmosphere), the discussion continues to be based on bathtub chemistry and steam engine physics which will never give any answers to the sophisticated and exotic energy technologies now available for "special projects".  Steven Jones told me in Vancouver at the 911 conference that his particle samples came from within 25' of the WTC buildings.  Well anyone knows the settling velocity of particles is related to size, and nanoparticles have such a small settling velocity that motion of air particles keeps them permanently suspended - therefore Jones samples are the BIG CHUNKS and the huge volume of nanoparticles produced simply disappeared into thin air.  He didn't even sample them because it requires extremely sophisticated equipment such as charged plates to collect them on... filters don't do it.  The investigator must have an advanced background in nanoparticle physics and quantum dynamics... and that is the key to what happened at the WTC on 911.

I am a Livermore lab whistleblower.  I watched directed energy beam experiments being conducted in the atmosphere, from the laser facility at LLNL in the middle of the night, from my house in Livermore when I was working at LLNL.  Until space weapons capabilities and HAARP are taken into consideration to explain the molecular dissociation (into nanoparticles) of two very large buildings, as well as the 4th generation nukes that were used to break down the structural integrity of the buildings, then the answers are coming from a noisy room of opinions.  Opinions are not science.  No one has explained the presence of levels of uranium, tritium, and the presence of deuterium in the air monitoring conducted and reported by Dr. Thomas Cahill for 5 months after 911 at the WTC - which began after Oct. 5.  He reported the highest concentration of metals and nanoparticles ever measured in US air samples.  The question is, why did the Dept. of Energy (Steven Jones
 former employer at Los Alamos nuke lab) ask Dr. Cahill to voluntarily do air monitoring specifically AFTER Oct. 5, and why did DOE want that air monitoring done for 5 months.  Cahill received no funding for a very expensive and extended study.

What we know from the Israeli bombing of Lebanon with 5000 US depleted uranium bunker busters, is that the bomb craters also had deuterium and high levels of U235 present as well as very high radiation reported for the first 3 weeks which dropped off quickly because it was neutron activation products.  The 4th generation nukes that the US stuck into the bunker busters are the size of matchboxes I was told by Dr. Chris Busby who had the bomb crater samples tested at the British govt. radiation lab.  So that takes it back to the time gap from Sept. 11 to Oct. 5 when DOE did not want air sampling data collected.  Why?

The energy budget required to destroy the integrity of the structure and the molecular dissociation of two huge buildings has to be the focus of any investigation of 911 at the WTC.  So far it has not been considered.

more information

to dust

spontaneous combustion
steel dissolving on descent

Thursday, June 16, 2011

CIA inside job - Lockerbie - The True Motive

"In the 1990s, a CIA agent, the ex-chief of station in Syria, told [Lindauer] that, contrary to what the U.S. government was insisting, Libya had nothing to do with the PanAm 103/Lockerbie bombing. It had been done by Syrians acting on behalf of some U.S. intelligence agents, who had been caught in criminal actions by an oversight team, and sought to kill that team as they were flying back to Washington to report. She communicated that information to various members of the U.S. intelligence community, and wrote some of it in a deposition for the trial of the Libyans who were being framed by the U.S."

Pan Am Flight 103 was Pan American World Airways' third daily scheduled transatlantic flight from London Heathrow Airport to New York's John F. Kennedy International Airport. On Wednesday 21 December 1988, the aircraft flying this route—a Boeing 747–121 named Clipper Maid of the Seas—was destroyed by a bomb, killing all 243 passengers and 16 crew members.[1] Eleven people in Lockerbie, in southern Scotland, were also killed as large sections of the plane fell in the town and destroyed several houses, bringing total fatalities to 270. As a result, the event has been named by the media as the Lockerbie bombing.

On 24 February 2011, Libya's former justice minister Mustafa Abdul Jalil said that Muammar Gaddafi had personally ordered the Lockerbie bombing

There were at least four U.S. intelligence officers on the passenger list, with rumours, never confirmed, of a fifth on board. The presence of these men on the flight later gave rise to a number of conspiracy theories, in which one or more of them were said to have been targeted

Matthew Gannon, the CIA's deputy station chief in Beirut, Lebanon, was sitting in Clipper Class, Pan Am's version of business class,[26] seat 14J. Major Chuck "Tiny" McKee, an army officer on secondment to the Defense Intelligence Agency (DIA) in Beirut, sat behind Gannon in the center aisle in seat 15F. Two Diplomatic Security Service special agents, acting as bodyguards to Gannon and McKee, were sitting in economy: Ronald Lariviere, a security officer from the U.S. Embassy in Beirut, was in 20H, and Daniel O'Connor, a security officer from the U.S. Embassy in Nicosia, Cyprus, sat five rows behind Lariviere in 25H, both men seated over the right wing. The four men had flown together out of Cyprus that morning.

By Alex Thomas with Susan Lindauer
February 27th, 2011 - The Intel Hub

9/11 Whistleblower Susan Lindauer On Gadhaffi,
CIA Drug Running in Lockerbie and Israeli Bribes

Listen to the interview here.

In another ground breaking interview on The Intel Hub, former CIA Asset and 9/11 whistleblower Susan Lindauer discussed her visits to the Libyan Embassy in Washington this week, and revealed that she started talks for the Lockerbie Trial with Libya's diplomats at the United Nations.

Lindauer dished on Gadhaffi, Libya's vendetta culture and how tribalism might have inspired Gadhaffi's recent desperate gamble for survival.

She also explains how the Lockerbie bombing was tied to the CIA's involvement in heroin trafficking out of the Bekaa Valley in Lebanon during U.S. operations to rescue Terry Anderson and other hostages in Beirut.

Susan explains how infuriated Defense Intelligence agents became determined to expose CIA complicity in Middle East heroin trafficking, and how terrorists took out both teams to protect their lucrative cartel.

Lindauer also talked candidly about how Israel tried to buy U.S. Intelligence officers and Assets— though she emphatically denies, under any circumstances, ever accepting money from the Israelis herself.

Whether or not other agents within the government did take bribes is unknown at this time.

For the first time on record, she revealed that a known Mossad agent tried to bribe her into handing over Iraq's collection of banking records on Al Qaeda's financial pipeline by phoning her home in Maryland while she was traveling in Baghdad, and promising to deliver a suitcase full of cash to any city in the world in exchange for the papers.

Israel's obvious knowledge of her travel itinerary debunks the CIA's long-standing denial of knowing about her trip to Baghdad, which figured prominently in her 5 year indictment on the Patriot Act

Monday, June 13, 2011

Lucid Money Theory 1935 write-up

JUST READ THE CHAPTER HEADLINES....  very very interesting, maybe even

 Published in English translation as an appendix in E. Milhaud, ORGANISED COMPENSATORY TRADING
  Williams and Norgate Ltd, London, 1937


 By Dr Walter Zander

The subjoined study is the outcome of a lecture delivered by the author on 8 March 1935 before the National Institute of
Geneva (Institut National Genevois).

The devaluation of the belga, which supervened in April 1935, is taken account of here. On the other hand, the May 1935 crisis
of the French franc took place after this study had gone to press. It forms an additional link in the lengthening chain of monetary
difficulties and offers one more illustration of the dangers to which every monetary system, even when supported by an enormous
gold reserve, is exposed under the rule of a forced rate for the notes of central banks. The proposals so far made known for ending
the French monetary crisis do not suggest anything beyond what is implicit in the views generally current to-day.

Berlin, 2 June 1935.

Dr. Walter ZANDER.

1. The Monetary Chaos.  
The States participating to-day in the world economy
may roughly be said to be divided into two groups. One of  
these has abandoned the gold standard and has thus removed
the foundations of its currency. The other has introduced
foreign exchange legislation and has thereby abolished the
freedom of settlement operations. The first group includes  
more particularly England, the sterling bloc countries, the
United States, and Japan; the second group,  Austria,
Germany, Russia and the great majority of the remaining
countries. Placed between these two groups, is the steadily  
disintegrating gold bloc. Italy left it for all intents only
recently and yesterday as it were Belgium followed suit. If  
we bear in mind that since the War France and Poland had
already devaluated their currencies to a fraction of their pre-
war parity, virtually Holland and Switzerland alone may be
said to uphold the pre-war monetary system. However, even
in these two small countries, which represent but a tiny
fraction of the world  economy, certain  restrictions
concerning the convertibility of banknotes  and the gold
market have been introduced, and the general uncertainty as  
to the future of currencies exerts a baleful influence in these
countries also.  
2. Disadvantages of Devaluation.
Whether the abandonment of the gold standard  is
advantageous to an economy, is decidedly problematic. In
most cases the object aimed at has not been attained. So far  
as devaluation is intended to stimulate exports, we should not  
forget that for most countries the magnitude of their export  
:trade compared to that of their total trade is comparatively
insignificant. This alone renders it questionable to embark,  
for the sake of the export trade, on measures which modify
the basis of a national economy as a whole. Moreover, such
measures, if successful, may be imitated by any other
country, thus nullifying their favourable effect. Accordingly,  
the abandonment of the gold standard has led to "a race for  
the worst currency", in which the most powerful States are
participating. It is obvious that in the long run such measures
for the stimulation of the export trade are bound to prove
Moreover, devaluation does not only affect the export
trade of a country. On the contrary, it touches every branch  
of an economy. This holds most especially of imports, since  
these must become dearer to the precise extent that exports  
become cheaper. So far as exporting, like in Germany for
example, presupposes the importing  of raw materials, a
portion of the anticipated gain is thus necessarily lost. But, in  
general,  import restrictions, so popular to-day in many
countries, lead eventually to a decline in exports, for the  
simple reason that in the last resort exports can only be paid  
with imports.  
Furthermore, money debts abroad are augmented by a
devaluation of the currency.  
However, what is of crucial importance is the fact that an  
abandonment of the gold standard involves the devaluation  
of the entire savings of a country, particularly as invested in  
savings banks, State loans, bonds, and mortgages. If the  
effect of a general adjustment of prices to the fall in the value  
of money is not visible at first or is deferred by artificial
devices, eventually prices always rise when a currency has  
been devaluated.  
Thus while the intended advantage for the export trade is  
emphatically dubious and at best only of passing
importance, the loss in savings and capital is certain and
But even if the reason for abandoning the gold standard,  
as in the case of the United States, is the desire to devaluate  
capital savings, - that is, if it is intended thereby to adjust the  
claims  of creditors to fallen prices and to the shrunken
turnover of the debtors - the success is nevertheless more
than doubtful. For what is decisive for the value of a claim is  
not so much its magnitude as the business turnover of the  
debtor. Everything depends therefore on increasing trade and  

this is nowise assured by attacking the rights of creditors, to
say nothing of the moral and economic disorganisation  
which this creates.  
The heavy depletions on the capital market,  the
abrogation of the rights of creditors, the menace to State
credit, and the decline in the standard of living, represent
drawbacks which  ultimately outweigh the transitory
3. Disadvantages of Foreign Exchange Legislation.  
The injuriousness of foreign exchange legislation is even
more patent. Everybody agrees, and the President of the
Reichsbank, Dr. Schacht, has repeatedly expressed himself
to this effect, that foreign exchange legislation constitutes a
great evil, even though in most quarters such legislation is  
considered inevitable.  

Foreign exchange legislation places obstacles in the way  
of settlement operations. These obstacles, in turn, hamper  
trade. But every decline in trading leads necessarily to a
decline in well-being, as the latter, in our age of the division
of labour, depends on commerce. Everything therefore that  
obstructs trading tends to intensify want and unemployment.  
4. Inadequacy of Compensation and Clearing  

All attempts to surmount the difficulties involved  in
foreign exchange legislation have hitherto proved abortive.  
This is especially true of the different forms of compensatory
trading and is evident as regards its earlier developments. It  
could  happen then, for instance,  that an instrument  
manufacturer had to accept in exchange coffee and was thus
compelled to become a produce dealer. In principle, later
developments left matters unchanged. It is the very essence  
of a compensatory transaction that there is properly speaking
no money payment involved and that the goods themselves  
have to fulfil this function. That is, every such transaction
represents a barter operation.  
Whilst  it is agreed that movements of goods (in the
broadest sense) underly all settlements, nevertheless as much
as fifteen centuries ago the Roman Emperor Justinian
explained in his Corpus Juris why barter operations are
necessarily inferior to monetary transactions. And yet the  
distinguishing mark  of the present-day international
compensatory trade is the abandonment of the monetary  
system and the falling back on barter. It is evident that a form
of economy which the Corpus Juris deemed obsolete, must  
be unequal to the task of conducting efficiently the exchange
of goods in our highly developed age. A serious effort should
therefore  be made to re-instate the system of monetary  
settlements in international transactions.
Similarly with so-called clearing agreements between  
countries. These have now become very common, but they  
cannot remove the difficulties arising from foreign exchange  
legislation, for apart from the fact that in most cases, as
between Germany and Switzerland,  they have led to a
considerable dislocation  of trade, they are necessarily  
confined to transactions between two countries, while the  
realities of life demand  freedom  of movement in every
direction and rebel against bilateral arrangements. They lack  
therefore  the necessary  fungibility and the attempts to
supersede the monetary system in this way have hence failed.  
The  League  of Nations  Committee for inquiring  into
international  clearing agreements has accordingly  drawn  
attention recently to their disadvantages and recommended
their abolition.  
5. Need for Stable Standards of Value and for Removing  
Restrictions' to Settlement Operations.  
Shrinkage of international and of intra-national trade,
want and unemployment, heavy investment losses, and a
general uncertainty and loss of confidence, characterise the  
present situation in most countries. It is imperative to create  
once more reliable and stable standards of value and to
secure  the removal  of the impediments to settlement  
operations between countries. The solution of these closely  
related problems has become a question of life and death for  
our social order.  
6. Falsifying the Gold Standard through Banknotes  
being Legal Tender.  
Whatever the monetary system of a country, it is essential
that the measure of value  should  be clearly and
unequivocally determined. Thus where  there is a gold
currency, a silver currency, or an index currency, the value  
should be measured by gold, silver, and the index
respectively. This basis of measuring economic values, and  
therefore of any monetary system, is destroyed when in the  
case of a gold or silver currency the notes of the bank of issue
are made legal tender, for this compels everybody to accept  
these notes in payment regardless of their real value.
Compulsory acceptance renders it even impossible  to
measure the notes by the unit of value and thus to ascertain  
their value within the country. Indeed, it establishes a legal
fiction on the basis of which note and unit of value are  
identical. For this reason, the names of the units of value -  
e.g., the terms dollar, mark, pound - become ambiguous in
that they mean now a fixed weight of gold and then the note  
of a bank of issue. Accordingly, the measure of value, on the  
unambiguity of which everything depends, comes to have  
two definitions.  This  renders  impossible any real
measurement and thus the whole  monetary system  is

This falsification is generally hidden from the public so
long as the central bank is legally obliged to redeem its notes.
This, however, only masks the reality, since convertibility
introduces in the measurement of value an alien element.  
Indeed, the fact that convertibility becomes a decisive factor,
shows how the whole problem  has assumed  a different
Where convertibility is suspended, we have only a pure
paper  currency,  this despite strenuous  legislative and
administrative efforts to keep the value of the paper at a
certain definite level, for what counts now is no longer the  
value of the gold, but the question whether the note of the  
central bank, measured by gold, changes its value. In fact,  
the system that has been in general use since the beginning
of the World War, including the so-called gold standard or
nominal gold currencies,  may be described as paper

7. Compulsory Acceptance a Relative Novelty.  
Although the compulsory acceptance of banknotes  
appears to-day so natural that most people cannot imagine a  
means of payment not having that character, this system has  
in reality only come into general use in recent times. Here are
two illustrations  
Par. 2 of the German Bank Law of 1875, provided :  
Payments statutorily required to be made in money need
not be accepted when tendered in banknotes and the
constituent States cannot enact such an obligation for the
State treasuries.

This provision was only replaced by its converse in 1909.
Article 3 of the Act of 1 June 1909 decreed :  
 The notes of the Reichsbank are legal tender.  
The course of development was similar in Switzerland.  
Here article 39 of the Federal Constitution of 1874 prohibited  
once  for all the compulsory acceptance of banknotes.
However, already in 1891 the Constitution was amended and  
they became legal tender in 1914.  

8. Compulsory Acceptance establishes the Dependence
of the Currency on the Central Bank.  
The statutory obligation to accept the notes of the central
bank  in settlement  operations involves  not only the
falsification of the basis of the currency. It also makes the
fate of the currency dependent on that of the central bank and  
frequently on that of the banking system generally. If for any  
reason the central bank can no longer redeem its notes or  
maintain their parity - that is, if the market rate of the bonds
it issues falls - then, owing to the legal equivalence between  
the notes of this bank and the legal standard of value, the
calculation of values generally will be prejudicially affected.
Thus it -was in the main the situation of the Bank of England,  
which led in 1931 to the abandonment of the gold standard  
and, similarly, it was the National Bank of Belgium that
suggested in 1935 the devaluation of the currency.  
Almost a century ago Lord Overstone grasped this
interdependence when he said that if he ruined his private
bank, he would be ruined, but that if the Bank of England  
committed a gross blunder, the Bank could save itself, but the  
whole of the community might have to suffer grievously.  
9. Compulsory Acceptance a Condition of every  
Moreover, compulsory acceptance for banknotes forms  
the legal and conceptual  basis of every inflation, In the
absence of such an obligation, bank crashes, with all their dire
consequences, may occur, but never an inflation, for the
destruction of the standard of value and the falsifying of all  
monetary relations, which are the mark of every inflation, can  
never  result from the collapse of a single bank. This
confusion is only possible when a legal equivalence has been  
established between the notes of this bank and the standard of  
value. It was compulsory acceptance that brought forth the
ominous slogan of the German inflation period : "One mark  
is as good as another" ("Mark gleicht Mark"). History has not  
known an inflation not due to the legal obligation to accept.
10. The Gold Standard as Gold for account.  
If, then, the pre-conditions of an inflation are to be
eliminated and a reliable :and stable currency  is to be
assured,  if more especially the gold standard  is to be
restored, the falsification introduced in recent decades must
be eradicated and the earlier separation between standard of  
value and means of payment must be re-established.  A
compulsory exchange rate excludes  a stable and safe
currency.  No wonder  the distinguished  German  historian
Niebuhr stigmatised compulsory acceptance as "a legislative  
provision both ridiculous and abominable" (Nachgelassene
Schriften nichtphilologischen Inhalts, 1842, p. 485 ff.)
The re-introduction of the gold standard in Germany in
October 1923, after the inflation, offers an impressive and
instructive illustration. The notes of the Reichsbank, which  
were legal tender, had completely collapsed and their value  
could only be stated in astronomical fractions. At long last it
was decided to introduce calculating in gold value. First,
taxes were thus calculated. Then a new institute of issue, the  
Rentenbank was founded, whose accountancy basis was to  
be gold units. There was, and this cannot be too strongly  
insisted on, no legal obligation for the public to accept the  
new notes in payment, and these notes have to this day never
been legal tender, They have therefore never been identified
with the unit of value which was then the gold mark The
system, which lasted from the passing of the inflation in the  
autumn of 1923 until the introduction of the new Bank Act
in the summer of 1924 (which Act formed part of the series  
of Dawes Acts), was therefore a pure system of calculating  
in gold units which was not falsified by any compulsory
 A similar example,  although  confined to one domain
only, is offered by China which recently adopted a gold unit
for its customs  charges. By a decree of the Minister of  
Finance of 15 January  1930, counting in silver in the  
department of maritime customs, the most important for the  
Chinese budget, was replaced by counting in gold. The basis
for these calculations  in gold is a weight  of 60,1866
centigrammes of fine gold and represents the customs gold
unit. This, customs unit is exclusively a calculating unit and
the decree specifically provides that the payment of duties
may, as before, be made in local means of payment, that is in  
silver dollars and in banknotes. Of course, these are only  
accepted in payment at the current exchange irate, this being  
measured by the customs gold unit.  
 In conformity with the foregoing  illustrations, it is
therefore  suggested here to introduce  generally  (whilst
abrogating the statutory obligation to accept the notes of a
central bank) calculating  in gold value and thus to re-  
establish the conditions existing until 19,09 in Germany and
until 1914 in Switzerland.
11. Is the Inconvertibility of Notes incompatible with the  
abrogation of Compulsory Acceptance ?  
 It ,might be objected that before the War compulsory
acceptance could be dispensed with because then, unlike
now, the notes could at any time be converted into gold. The
objection does not hold, for convertibility is not of decisive
importance, as will transpire from what follows.  
12. Convertibility as a Basis of Value for Paper Means  
of Payment.  
 It is generally believed that the value of banknotes resides
in their being convertible into metallic currency, banknotes
being considered in the main a substitute for gold or silver.
Already Adam Smith, in a famous passage in his Wealth of
Nations  (bk.2,  ch.2), declared  that all paper  money
represented only gold or silver. Similarly, the Bullion Report
of the British Parliament of 1810, which was very strongly  
influenced by Ricardo, expressed itself to the same effect.
Probably not a single theory in the whole domain of political
economy has evoked such universal assent.

It is therefore natural that this view should have been
incorporated in legislative enactments. Since paper money is
regarded as a substitute for gold or silver, it must be at any  
time convertible into these. Banknotes and convertibility are
therefore interdependent conceptions and hence all bank acts
the world  over contain  definite provisions concerning
convertibility,  metallic cover, and the ratio of the notes
issued 'to the current gold reserve. Indeed, every monetary
claim is hence regarded as being in the last resort a claim for  
payment in gold, although there is no necessary connection
between this and a gold standard, for a gold standard  
primarily presupposes, apart from calculating in gold, that a
creditor cannot refuse acceptance of a payment in gold, i.e.,  
that there is a general obligation to accept gold, but by no
means the right of a creditor to insist, in any and all
circumstances, directly or-indirectly, on being paid in gold.  
Firmly based, on the one hand, as seems the general  
conviction that convertibility is necessary (and practically
everywhere the ratio of the gold cover is deemed to be of the  
utmost importance), there is, on the other, no doubt that to-
day most banknotes have become legally, or at least actually,  
inconvertible, without thereby losing all their value. In fact,  
for some  notes there exist to-day no provisions  of
redemption, and yet they possess value. Accordingly, there
must be, apart from convertibility, another basis for the value
of paper means of payment.  
13. State Fiat as Basis of Value for Paper Means of  
Payment ?  
All eyes are turned towards the State to see whether, by
its fiat, it is able to confer value on valueless paper. It
becomes, however, quickly manifest that the power of the
State is strictly limited in this sphere. All large-scale  
monetary devaluations known to history have referred to  
means of payment the value of which rested on a State fiat.  
This holds, for example, of the notes which the Scotchman
John Law issued, in France at the beginning of the eighteenth  
century and even more so of the assignats of the French
Revolution. In both instances acceptance was at first not  
compulsory. But presently the obligation to accept them was
decreed and soon reinforced by penalties. On 11 April 1793  
the French Government prohibited the use of all metallic
money on pains of six years in chains, and in September of
the same year the decrying - that is, the verbal discrediting of  
the assignats - became punishable  with death and the
confiscation of property.  
These drastic measures proved, however, unavailing. The
exchange value of the assignats declined steadily. At the  
close of 1793 it was only 22 % and in 1795 it had fallen to
under 1%.  
 Not so dramatic, but not less impressive and instructive,
were the experiences during the two great American  
monetary devaluations on the occasion  of the war of  
liberation and of the civil wars. There, too, the fiat of the
State was unable to prevent devaluation.
 But by far the greatest financial catastrophe of modern
times  was the German  post-war  inflation. It is common  
knowledge that the legal obligation to accept the banknotes
of the Reichsbank could not prevent their complete collapse
and it is most significant that the notes of the Rentenbank,  
which succeeded in stopping the inflation, have never been  
legal tender.  
 Nor was it different in the case of the Austrian and  was
Russian inflations. Nowhere, in fact, has the power of the its
State been able to prevent devaluation.  
 But this was not only the fate of weak States crushed by  
defeat. France and Italy, both victors in the World War, had
to suffer heavy devaluations which annihilated more than
four-fifth of the value of their currency.  

 It cannot be therefore the State's fiat which confers value
on inconvertible paper money.  

14. Confidence as a Basis of Value for Paper Means of
Payments ?  
 Not even  confidence and  national enthusiasm,  
revolutionary determination and religious  belief, can
accomplish this in the long run. One example may suffice.
When during the French Revolution in April 1793 the above-  
mentioned currency  law was promulgated, the whole
population of Metz assembled on the Place de la Légalité,
took a solemn oath, in the presence of the garrison, the
National Guard, and the administrative and the judiciary staff, not to draw
any distinction between the face value of  the paper
money and silver. Similarly, from Toulon, where
analogous ceremonies took place, the Government
received  a report stating that. the population would
carry out the law  with the religious respect (
"respect religieux") due to it. at However, after a few
days the workmen at the arsenal of Toulon petitioned
that they might have their wages paid in silver, for,
they declared, "try as we may, we cannot live  
otherwise". (See Marion, Histoire financière de la
France,  vol. 3, p. 47, Paris, 1921.)

 Even the powers of the soul cannot,  therefore,
permanently confer value on paper money.  

15. Acceptance by Fiscal Offices as Basis of Value for
Paper Money.  The value of inconvertible paper means of
payment has a  different basis, clearly revealed, in
the history of German finance. Thus during the
nineteenth century several German States issued paper
money the value of which did not lie in  

its convertibility, but in that the State agreed to
accept at its

pay offices the notes it issued at their face value,

of their rate of exchange. German financial science

this the taxation foundation ("Steuerfundation" ).

 This acceptance by the State should not be confused
with  the current. obligation to accept, for under-the
regime of compulsory acceptance the taxation,offices,
following the universal custom, accept notes at their
actual and not at their nominal value. Thus the notes
of the Bank of England are  worth no more at the
English fiscal offices than anywhere else. The State
accepts them at their paper value and not at the value
of the gold pound. Compulsory acceptance and taxation
foundation are therefore fundamentally different. The
basis of value of this paper money lay in that it
accepted at the fiscal offices of the issuing authority
at nominal value and, accordingly, this obligation to
accept was  the important element in the wording of the
warrants. Thus the Saxon fiscal notes simply read : -  

In conformity with the edict of 1 October 1818, this
will    be accepted at the Royal fiscal offices,

and the Prussian money orders of 1835 and 1856 contain,
besides the value of the order, only the statement

 Of full value in all payments.  

 Similarly in most other countries. It is true that in
many cases, as in Baden, Austria, and Wurttemberg,
there was, in  addition to the obligation to accept by
the fiscal offices -that is, to the fiscal foundation-a
more or less widely current obligation to redeem the
warrants. However, here also the fiscal foundation was
of prime importance and redemption  constituted only a
kind of supplementary guarantee. This is  already
expressed in the order of the two undertakings on the  
notes. Thus we read on the Baden paper money of 1849:  

 Paper money of the Grand-Duke of Baden, which all  
Baden fiscal offices accept in payments at its full
nominal value i.e., as equivalent to the gross silver
money struck at  the country's standard of coinage-and
is exchangeable at  sight for gross silver coins at the
redemption office Carlsruhe.  

 Likewise, in the Reich Act concerning the issue of
Reich  fiscal office notes of 3,0 April 1874, § 5, we
read :  

 Federal fiscal notes are accepted at their nominal
value in   payments made to all fiscal offices of the
Reich and all  constituent States. They are redeemable
at any time on demand for cash by the Reich's Central
Fiscal Office on the Reich's account.  

 In both cases therefore the fiscal foundation comes
first. It covers all fiscal offices, whilst the notes
can only be redeemed at one fiscal office.  

 The Wurttemberg Act of 1 July 1849 makes this relation
still plainer. Article 2, par. 1, provides:  
 This paper money is accepted at its nominal value in
payment at all fiscal offices of the State, as also at the tax  
 collecting offices. These offices are instructed to redeem  
 on demand this money, so far as the available funds  
permit , and in amounts not under twenty gulden at a time.
Here the claim to redeem notes is conditional on means
being available. According to the clear wording of the Act,
the notes are in principle only covered  by the fiscal

Later,  this principle was further developed in the
Rentenbank notes of 1923. Here no provision at all was made
for direct redemption. Apart from  utilising them in
connection with public pay offices, the holder had only a
claim to convert them into annuity bonds, which fact has
played no important part in practice. Lastly, in recent years  
the  fiscal foundation has been most  conspicuously
exemplified in the fiscal warrants of 1932, although these are
not intended to be means of payment proper. They cannot be,
either directly or indirectly, converted into ready money. Nor
can they be exchanged for securities. No redemption fund
exists nor repayments or amortisation. Their value is entirely
due to their being accepted by the fiscal offices at the
indicated value, regardless of their exchange rate.  
From the Saxon pay office notes to the fiscal warrants of  
the Reich, the same principle of a fiscal foundation  is
16. Commercial Bills as Basis of Value for Banknotes.
 The principle of the commercial bill for the Scottish
banknotes corresponds to that of the fiscal foundation for
State paper money. Whilst English  banknotes  have their
origin in the receipts given by the London goldsmiths for
gold deposited with them (which means that redemption is of
their essence), the Scottish notes have a different history. In  
the latter case, the banks gave in exchange for commercial  
bills round sums in notes of small denominations, expressing  
themselves at the same time ready to accept the notes they  
had thus issued, in payment  at their face value for the
commercial bills they had discounted. Thus the basis of the
value of the English notes was the gold deposited, whereas  
the value of the Scottish notes was based on goods sold as  
expressed in commercial bills.  

 It is true that the Scottish  banknotes were  also
redeemable in precious metal, very much as was frequently
the case with the State paper money, but redemption played  
an indifferent part in practice. By means of a so-called option  
clause the banks frequently reserved to themselves the right  

of postponing the redemption of the notes several months  
after they had been presented. Thus they could wait until the
commercial bills had matured. When, on the withdrawal of
the bills, the notes flowed  back, they disappeared from
circulation and the question of their redemption did not arise.
So far as the bill debtors redeemed their debts in coin or other
means of payment and not in -the notes of the bank, the bank,
without drawing  on its reserves, acquired  thereby  the
necessary means of redeeming any floating notes.  
Ultimately, in any case, the value of these notes lay in
their being accepted by the bank that had issued them.  
17. Fiscal Foundation and Commercial Bill as Forms of  
The  fiscal foundation  for State paper money  and the
principle of the commercial bill for banknotes are therefore  
basically related. In both instances acceptance by the issuer
at their nominal value, regardless of the exchange rate of the  
paper, is decisive. The significance of this acceptance (or
reflux) is manifest. If, for example, the State pays an official
with such a warrant, if the official passes this warrant on to  
his baker in payment for bread, and if, lastly, the baker  
liquidates his tax debt with it, the baker clears his debt to the  
State with the warrant that the official had passed on to him.  
In the last resort we have here a clearing process, i.e., a
balancing of mutual  obligations. And  these settlements,
unlike in barter or in modern international compensatory
transactions, are not made without resorting to money. On
the contrary, the exchange is operated by means of a clearing
process cancelling the mutual claims through our monetary  
An  inconvertible  paper  means  of payment assumes
therefore a reflux. It represents, in fact, a clearing certificate
and  derives its value from the exchange of economic
services. This indicates consequently the limit to issues of
unredeemable notes. Since the value of freely quoted money,  
as for instance of the Reich pay notes of 1874 .or of the
Rentenbank notes, is determined by supply and demand, no
more notes may be issued than there is a demand for, that is,
than must flow back to the issuing centre. Thus in the case of  
State paper money, the aggregate sum to be issued must  
depend on the aggregate tax claims due or all but due. Within
this limit issues are always justifiable. If, however, this limit  
is exceeded  by circulating paper money  representing  tax
claims  in the distant future, depreciation  will inevitably
follow, even if the State should promise to accept the notes  
at their face value in the future.  
 Similarly with banknotes. In principle, only short-term  
obligations should be admitted as cover. The nearer the due  
date of the bill, the greater is the demand for means of
payment in order to redeem it and the more assured is the  
value of the banknotes issued in connection with the bill.
The more distant the due date and the less assured the payment,
the more in jeopardy are the notes having such a basis.  
Rightly,  therefore, many  bank acts, among  them that of
Germany, expressly  provide  that only sound  commercial
bills falling due within three months  at most may be
discounted by banks of issue, Indeed, experience teaches  
that long-dated financial bills have hurled whole monetary  
systems into the abyss.  
18. Redemption or Clearing,.  
 There exist, accordingly, two entirely independent and
wholly different foundations whereon the value of paper
means of payment may be based : redeemability in precious  
metal and clearing. There is no third possibility.  
 Thus all paper means of payment in every country may  
be to-day actually resolved into these two elements of value.
Insofar as notes can be really exchanged for gold, their value
may be attributed to this. So far, however, as there is no
redemption and there is an inadequate metallic cover, only  
clearing can confer value on the notes, and this either by
clearing against commercial bills or against fiscal claims.
Moreover, in order to extend the facilities for clearing and  
thus to increase their value, many countries, at a time when  
banknotes were not legal tender, introduced in addition a tax
foundation for the banknotes, statutorily obliging public pay
offices to accept them. (See, e.g., the Federal Act concerning  
the Swiss National Bank of 6 October 1905, article 23.)  
 The  difference  between  the two elements  of value,
convertibility and clearing, which latter means  here the
clearing of taxes due, is well exemplified in the Bank of
England. Here, since the Peel's Act, the note circulation is
divided into a so-called fiduciary and non-fiduciary issue.
The latter must have a 100% gold cover. It reflects the pure  
idea of convertibility. The fiduciary issue however, which at
present amounts to 260 million pounds, is based exclusively,  
on "an eternal debt of the English State". It is not covered by  
any redemption fund. It rather embodies the idea of a fiscal  
 How, then, are these two elements of value related ?  
Although in the public mind  the idea of convertibility  
predominates, what is actually of decisive importance for the
prosperity of a country is clearing.  
 The idea of convertibility makes the quantity of means of  
payment basically dependent on the gold reserve available at
any time. This is an entirely impracticable principle. All
attacks on the gold standard, directed against this principle,  
which more especially combat the creditor's right to claim  
from his debtor directly or indirectly gold, are to that extent  
justified, For there is never a possibility of meeting  all
liabilities by gold payments. This holds both of international  
obligations and of domestic payments. It was therefore of
momentous importance and evinced profound insight, when
Milhaud in his great work, A  Gold Truce, called for a
universal gold truce.  
Whether a country possesses a gold reserve, depends  
always more or less on chance. Accordingly, the amount of  
the means of payment in circulation should never, not even
under  the most  orthodox. gold standard  system, be
determined by the size of the gold .reserve. The economic  
life of a country would have otherwise to shrink regularly
with the shrinkage of its gold reserve. In reality, the
exchange of goods remains a necessity and possible, even if  
there is no gold reserve at all. On the other hand, as the cases  
of France and the United States to-day show, not even the  
largest gold reserve of a central bank can save a people from
widespread unemployment and poverty, whilst a monetary
system intelligently based on mutual clearing, can provide a
people with work and wealth, even in the absence of any
store of gold.  
19. Examples of Clearing Money.  
The diverse possibilities of issuing inconvertible means
of payment based on the idea of clearing can only be
adumbrated here.  
In the first place, we may mention the inconvertible and
freely quoted State paper money described above. In most
countries  to-day this is to be found in a more  or less
disguised form. Besides States, local authorities may also
issue clearing notes for the imposts they are entitled to raise.  
Thus in the nineteenth century Hanover city issued notes
which promoted most effectively the town's prosperity.  
In the economic sphere, railways enter primarily into
account as centres for the issue of special railway clearing
notes. In Germany there is the noteworthy case of the
Leipzig-Dresden Railway founded by Friedrich List. This
Railway issued in the thirties of the last century railway
money to the amount of 500.000 thalers and this money, to  
the general satisfaction, freely circulated until the
establishment of the Reich. After the World War, the German  
Federal Railway also repeatedly issued its own means of
payment, most of which exhibited the character of goods
warrants, i.e., they were based on the principle of clearing.
Naturally, other undertakings, for whose goods or services
there is a general and constant demand, would also benefit by
such facilities.  
The  clearing principle is most particularly  useful in
international  settlements.  Thus leading firms might issue
purchasing certificates. For instance, certificates accepted at
their face value by the I. G. Farben Company or by Siemens,  
could be disposed of in London, Cape Town, and generally.  
To make the certificates more widely acceptable,  whole
groups of undertakings concerned with agriculture, export,
or the tourist traffic, might  agree to issue purchasing  
certificates  jointly. Issues might also be undertaken by
special  foreign trade banks,  whose  clients would  bind
themselves to accept the certificates in payments up to a
certain amount. Lastly, work provision banks might similarly  
be established to combat unemployment within countries.
For particulars on this subject, the reader is referred to the
valuable works of Milhaud and Beckerath published in 1933
and 1934.  

 The central banks existing at present in most
countries ought not to oppose the issue of such means
of payment. In  this connection we need not examine
here whether these banks have fulfilled the hopes
placed in them or have not rather  aggravated all
financial  catastrophes, such  as inflations and
deflations. In any case, so long as private enterprise
exists at all, mutual clearing  cannot  be monopolised
by a single central undertaking. The idea of a monopoly
is most  closely associated  with the idea of
convertibility. The issue of clearing warrants, which
neither  affect the store of gold nor are able, since
they are freely quoted, to modify the average price,
cannot in principle be restricted to central banks. 1t
ought rather, within the limits  drawn by the State, to
be allowed to develop freely.

20. Abrogation of Foreign Exchange Legislation.

 Once it is recognised that the value of inconvertible
paper money depends on the likelihood of the issuer
clearing it, the way  is open to abolish obligatory
acceptance and to re- establish the gold standard.
This, in turn, would facilitate the abrogation of
foreign exchange legislation, for this, too, is based
in the last resort on the idea of convertibility and of  
obligatory acceptance.  

In every country foreign exchange legislation is in
the main identical. The endless number of laws,
regulations, and  principles may be reduced to the
following three aims  

 (a) Retention of gold;

 (b) Retention of foreign means of payment (foreign  
exchange proper) ; and  

 (c) Restriction of payments abroad.  

 Compared with these, all other provisions are of
secondary importance. And these three aims may be
reduced to one, namely the seizure of gold. The
retention of foreign  means of payment and the
restriction of payments abroad are only means towards
attaining that one object. The foreign  means of
payment are seized because they are regarded as  
substitutes for gold and because it is anticipated that
by their redemption or, at least, by their being sold
on the international market, gold might be obtained in
exchange. Inversely, payments abroad are restricted as
far as possible  because it is feared that through the
efflux of means of payment the gold reserve might  be
drained  and the  maintenance of the parity be thereby
endangered. The idea  that gold is not only the
standard of value but ultimately the  sale and supreme
means of payment lies therefore at the root of this
type of legislation. Hence the efflux of gold and the  
associated threat to the redemption fund have  been
invariably the direct cause of the enacting  of foreign
exchange legislation.  

 Here also the obligation to accept the notes of the
central bank plays a. special part. Thus whilst the
State may leave to  their fate the freely quoted notes
of a private bank, without the monetary unit being
affected by the bank's exchange losses, the statutory
obligation to accept the notes of the central bank
implies  that they are identified with the  country's
standard of value. A loss in exchange in the case of
the latter involves therefore a modification in the
monetary  basis itself. Accordingly, the State is
compelled to maintain the parity of the notes of the
central bank so long as it is bent  on saving its
standard of value from fluctuations.

 The identification of the monetary unit with the
notes of  the central bank has, lastly, created another
source of danger  which has repeatedly  acted as a
decisive factor in the  introduction of foreign
exchange legislation, namely its close association with
certain large-scale banks at home. Thus the collapse of
the Kreditanstalt in Austria and the Darmstadt Bank  in
Germany instigated the introduction  of foreign
exchange legislation  in those countries. Of itself
there  existed no direct connection between these banks
and the monetary standard, and the example of Sweden,
which did  not rush to the aid of the collapsed Krueger
undertakings, shows  that in such emergencies other
methods may be  applied  than those chosen  by Austria
and Germany. However, where through the obligation to
accept the notes of a given bank a statutory bridge has
been built between the  banking system and the national
currency, the temptation will always exist to shift the
difficulties of the banks onto the  shoulders of the

 All these problems assume a very different complexion
if we take inconvertible means of payment to be what
they  really are, namely means of clearing in relation
to an issuer.  A fundamentally inconvertible note, the
value of which lies  in the issuer accepting it and
which therefore really involves no claim to payment in
gold but a claim to the services of the  issuer, can
never lead to a reduction in the gold reserve. A State
paper money based on such principles could be freely  
allowed to go abroad without this prejudicially
affecting the  currency. It could never entail
liabilities in precious metal. On the contrary, it
would necessarily lead to goods being exported and may
be accordingly even followed by an influx  of gold or
foreign exchange. What matters is that the means  of
payment shall not be legal tender; in other words, that
it  must be accepted by the issuer at its face value.
With this condition satisfied and the above-mentioned
limit to issues  being respected, even the heaviest
losses on foreign bourses  would involve no danger, for
the lower the market rate falls,  the greater the
temptation, would be to acquire the warrants,  inasmuch
as the issuer has to redeem them - at their nominal  
value, the loss being thus converted into a gain.
Everybody therefore who has to meet his obligation with
these warrants,  - in our example, the taxpayer - will
try to benefit by such  falls and thereby produce a
steady demand which has the  peculiarity of rising as
the market rate falls. This necessary demand provides
the floating power that imparts value to inconvertible
paper money. Such a means of payment need  not dread
the throwing open of frontiers. In the words of a Swiss
writer, it will, "like a carrier pigeon", return always
to its point of departure and necessarily lead to a
demand for home products abroad, in this way furthering
the export trade.    

 Since such a clearing warrant has by definition a
free market rate and is therefore not linked to the
currency unit,  the latter cannot be affected by any
fluctuations in the value of the former.

For  clearing warrants of the type described,  foreign
exchange legislation ceases to have any meaning, for
any stipulations relating to convertible money would
lose their  point. In all countries, therefore, sound
clearing warrants  should  be freed from their fetters,
since they were only imposed on them on account of the
unsound ones, and thus  at last bestow on the present
the freedom  of movement denied them to-day because of
the past. That is, foreign exchange legislation should
be abrogated at least for sound warrants.  Given  this
first step and the basis for a new economic structure
is laid. Further progress will be thereby  facilitated,
for in most countries  the inconvertible  notes could
be without difficulty converted into State paper money,
thus investing the present state of things in this
matter with its proper form. Should, however, one or
another central bank have transgressed the limits that
would apply to a fiscal foundation, it will not be
difficult to remedy this, without  fettering  a
country's  general economic life by foreign exchange

Nor can it be objected that the national economy requires
foreign exchange and can therefore not be satisfied with
clearing transactions, for, to begin with, we should remember
that probably in all countries depending on foreign exchange,  
the supply of the latter has shrunk despite the most stringent
legislation and that therefore the object aimed at has not been  
fully attained. But a more important  point is that both
commercial and financial debts, according  to firmly and
universally established views, can only be liquidated by the  
goods or services of the debtor, and it is just these that are
offered by clearing warrants. It must be therefore possible to
start again payment operations on this basis. So far as the
importing of raw materials is in question, this is not
challenged. A clearing warrant,  unhampered by foreign
exchange legislation and made out in gold units, is a fully
utilisable means of payment so long as there is a demand on  
the world market for the goods and services of the issuing
country.  If this condition is not satisfied, then foreign
exchange legislation also would  be of no avail. If an
exchange of goods is actually impracticable, - that is, if the  
country no longer plays a part in the world economy, - no  
debt can possibly be liquidated. This holds equally of
commercial and financial debts. No one can expect that a
country  possessing no gold, should pay in gold. Every
creditor should therefore recognise that a debtor can only
offer a lien on his goods and services.  
Years ago the Economic Committee of the League of
Nations expressed the same idea when it said that creditor
countries must either agree that debtor countries may directly  
or indirectly redeem their obligations in goods or services or  
they must be resigned to not receiving any payments. The.  
clearing warrants described here indicate the way in which
even heavy liabilities may be in time honestly liquidated, to
the common advantage of creditors and debtors.
 Once the banknotes that had become inconvertible have
been superseded by clearing warrants, the free gold market
can be at last re-established. So soon as gold has been
divested of the property ascribed to it of. being the exclusive
means of payment and representing  the core of money
claims, it becomes again a commodity like any other, Its free
movement no longer causes alarm and may therefore the
better fulfil the function of a standard of value. And this
completes the circle of our proposals, for the free gold
market which here appears as the result of -clearing, at the  
same time presupposes it, since the various means  of
payment can only be reliably valued when gold may be
freely moved.  
It follows, lastly, that under the system above outlined
there would be no objection to gold coins being minted for
private firms and this not, as seems to be the intention at
present in France, as a form of note cover, but for immediate
circulation with a view to measuring by them at any time the  
value of all other means of payment.  
21. Summary.  
Accordingly, we propose  
1. The introduction of unambiguously determined gold  
units of account as a monetary basis, e.g.
1 mark  = 1/2790 kg. fine gold.  
1 franc = y kg. fine gold.  
1 £ = z kg. fine gold.  
2. The transformation of the whole monetary system on the  
basis of a gold unit of account.  
3. The abolition of the statutory obligation of acceptance for  
 the notes of the central banks.  
4. The removal of the monopoly of the central banks and its  
 replacement by general regulations concerning the issue  
 of means of payment.
5. The abrogation of foreign exchange legislation and the  
 re-establishment of a free gold market.  
6. The unrestricted right to mint gold coins.  
22. The Practical Realisation of the Proposals.  

 a) Through international agreements.  

 Everybody is agreed that something should be done to
remove the monetary chaos and the obstacles to settlement  
operations. Here also hope is commonly centred  in
international conferences. However, the value of such
conferences for the solution of economic problems is not  
great. Think in this connection of the World  Economic  
Conference of 1933. This was eagerly looked forward to by  
all peoples and yet, notwithstanding careful preparation,
produced virtually no practical results.  
 However, even if within the near future a monetary
conference could be arranged to meet and if, moreover, full  
agreement could be reached among the participating States,
the effect would be at best to re-establish the parity between  
the monetary units and to impose an unconditional obligation  
on the parties not to modify deliberately this parity nor to
change it without the consent of the other contracting parties.
But that would only dispose of a comparatively small part of  
the present difficulties, for only most rarely - as in the United  
States recently - has the abandonment of the gold standard  
been an arbitrary act. In by far the majority of instances, the
gold standard was most reluctantly dropped. Heavy calls on
credit institutes, excessive claims on the central bank, a
rising  efflux of gold, and, finally, the threatening
impossibility, despite all efforts, of maintaining the parity of
the banknotes, were for the most part the really decisive
factors in the abandonment of the gold standard. For such
cases an international agreement on monetary parities would
offer no solution.  
 So long as the principle of central banks is retained and  
their notes, being made legal tender, are identified with the
standard of value, no international agreement will be able to
prevent the recurrence of present-day conditions , for under  
this system the collapse of a single leading bank, to say  
nothing of the collapse of the State finances, may render
impossible the maintenance of parity. However, even if, to
meet such cases, the several countries  concluded a
convention providing that the gold reserves of the diverse
central banks should be automatically mobilised to save the  
currency of a country in need, a scarcely credible sup-
position, even this would be insufficient in hard cases, for the
magnitude of the monetary obligations maturing at any given  
moment would probably  always  exceed the quantity of
available gold.  
 It also remains a moot point how the problem of foreign
exchange legislation could be settled at such a conference,  
seeing that the granting of loans, useful as these would be to
those immediately concerned, in no way solves the problem.
And yet without this, even a fresh determination of parities
would prove unsatisfactory.  On the contrary, the object
should be to rebuild on a sound basis the entire system of
international payment arrangements,  
b) Through intra-State legislation.  
From what precedes  follows the possibility that each
several State, having made up its mind, may, by abolishing
the obligation to accept and recognising the reflux principle,
re-establish for itself the gold standard and rescind its foreign
exchange legislation. This may seem fantastic. But the reader  
should remember the German inflation period. Then, too, an
escape  without  external assistance appeared  impossible.
"The hole in the West", speculation on foreign bourses, and  
similar obstacles, which Germans could not control, were
quite generally regarded as the causes of the depreciation of  
the mark. Eventually, when things were at their worst, when  
in some parts of the Reich serious disorders had broken out,
and when external help was out of the question, the country  
succeeded, by its own efforts, without the aid of any foreign  
Government, without an international conference or
convention, to stabilise the mark, to safeguard it against all
foreign speculation, and even after a few months to abrogate
the foreign exchange legislation then in force. To-day, as at  
that time, the free resolve of any country may determine the
fate of its currency. The country that first finds the way out,
that removes insecurity, and at the same time re-establishes
the freedom of monetary operations, will march well ahead
of the other countries. It may even be assumed that a mighty
stream of capital for long-term investment will pour into it
from all sides.  
 c) Through private initiative.
 Even if, however, no State were for the moment ready to
proceed  along this line, there remains the possibility of
finding a way out of the monetary chaos through private
initiative or at least to prepare the way for this. When in the
eighteenth century the national monetary units, because of
alleged State needs, continually fluctuated and when it was  
therefore impossible to rely on the value of currencies for a  
measurable time even,  Hamburg merchants, more
particularly, discovered a way out. By founding the famous
Hamburger Girobank,  they, following  the centuries' old
Chinese Tael system, made themselves independent of the
debased State coinage by adopting as the basis of all their  

accounts an unminted definite weight of silver in the place of
State money. This weight, called Mark Banko, constituted an
unchangeable unit of calculation,. which came to be of the
greatest  service economically for the whole  of Northern

 There can be no doubt that the application of the same
principle, with gold instead of silver as the basis naturally,
might exercise a similarly far-reaching influence to-day. Just
imagine that before the devaluation of the Belgian franc, a
Belgian undertaking of good repute had declared itself ready
to take up a long-term loan at its actual gold value, regardless
of the exchange rate of the franc. The crowd of would-be
investors would probably have broken through all barriers.

 In this connection the proposed private calculation in
gold  should on no account  be linked with the national
monetary system. Accordingly, I do not suggest here the
appending of gold clauses (gold dollar, gold pound, or gold
franc) to a country's currency unit, for experience teaches
that such clauses - which hold permanently before the
statutory means of payment its ideal as in a mirror - only
rarely survive the fate of the national currency. Thus in
Belgium, when the franc was devaluated, the gold clauses
were revoked and only contracts in foreign currencies were
left untouched. Private calculation in gold, like the erstwhile
Mark Banko system, should be independent of the national
currency. It should be therefore based on a separate unit, for
which a simple calculation in grammes of fine gold suggests
itself here. This, would  also serve as a basis for an
international calculating  unit, which  has. been widely
desiderated for many decades.

 All that would be demanded of the State is not to prohibit
calculating in gold. The State could never suffer through this,
for even if a Government should  deem  it expedient to
devaluate the national currency, as was frequently the case
already in the seventeenth and eighteenth centuries, there can
be no ground for imposing a devaluated currency unit on
those  who had freely agreed to use for their economic
transactions among themselves another and constant value
basis. Investors in all countries would joyfully welcome such
a solution and there are not a few undertakings which, under
these conditions, would be decidedly ready to place long-
term loans  at moderate interest rates. Once it is
demonstrated, however, that the monetary chaos, which
seems to most men the work of an inscrutable fate, may be
overcome, the profoundly beneficent effects of this for the
peoples of the world will not fail to become apparent.

(Translated by G.Spiller, London.)

Walter Zander (born June 8, 1898 in Erfurt, died April 7, 1993 in South Croydon) was a German-British lawyer, scholar and writer. He was Secretary of the British Friends of the Hebrew University in Jerusalem 1944-71, Governor of the University 1972-93, Senior Associate Fellow at St Antony's College, Oxford 1971-88 and author of several books and articles, many of them about Israel and its international relations.

The son of a prominent Erfurt lawyer, he studied at the Gymnasium, before being called up for military service in 1916. During World War I, he served as a non-commissioned officer in the German Army and was awarded the Iron Cross. After the war, he went on to study law, philosophy and economics in Jena and Berlin. After a brief period as an assistant to one of the leading lawyers in Berlin, he set up his own practice in the city. In 1929, he took a one year leave from his practice to study economics at the London School of Economics and the Sorbonne University.

He married Gretl Magnus in Berlin in 1931, and they had three sons and a daughter, among them legal scholar Michael Zander and conductor Benjamin Zander.

Sunday, June 12, 2011

11am Monday 7,000-page report will be declassified

not wikileaks, but still ...


Just 10 days before Lyndon Johnson died of a heart attack in 1973, he revealed to an aide his plan to visit President Richard Nixon to seek release of the Pentagon Papers and thousands of other secret Vietnam War documents.

On Monday, the federal government finally will release the infamous multivolume war history that was leaked to the press in 1971. The release comes 40 years to the day after The New York Times' controversial publication of much of the top-secret study compiled by the Department of Defense.

Austin's LBJ Library & Museum, which has had one of the complete sets of the Pentagon Papers since 1969, will unveil the 7,000-page report at an 11 a.m. news conference Monday.

"What the hell took so long?" would be LBJ's response to the official release if he were alive, said Harry Middleton, a past director of the LBJ Library and a White House aide to President Johnson.

"He felt, to get the whole story out, that everybody should have access to the papers in the LBJ Library," Middleton said by phone last week.

The Pentagon Papers, published by the Times and the Washington Post, showed that the Johnson administration escalated the war in Vietnam without informing the public of the extent of U.S. involvement or concerns about failure. LBJ presided over a massive ground war in South Vietnam and air bombing of North Vietnam. The war divided the American people and overshadowed the social and economic programs of Johnson's "Great Society" campaign.

When the Pentagon Papers were published in 1971, during the Nixon administration, Johnson was at his ranch in the Hill Country. He phoned Middleton at the LBJ Library to complain.

"This is only part of the story," Johnson said, according to Middleton. "They don't have the whole story."

The portion of the Pentagon Papers leaked to the press by military analyst Daniel Ellsberg did not contain the section about secret Johnson administration attempts to negotiate a peace agreement with North Vietnam. The Pentagon Papers, according to former Johnson White House aide Tom Johnson, also did not contain key documents generated in the Johnson White House, including what was considered to be the most secret of all foreign policy meetings: the "Tuesday Lunch." These meetings, held in the White House living quarters, included LBJ, the secretaries of state and defense, the CIA director, the chairman of the Joint Chiefs of Staff, the national security adviser, the press secretary and a scribe, who usually was Tom Johnson.

LBJ did not publicly comment on the Pentagon Papers leak at the time, according to records. But he told Nixon adviser Bryce Harlow that he didn't want to comment because he thought the Times and the Post were trying to "re-execute him," according to a book by Pultizer Prize-winning Times journalist Harrison Salisbury. "Without Fear or Favor: The New York Times and its Times" shows that Salisbury relied on an interview with Harlow, who phoned LBJ at his ranch after the Pentagon Papers were published.

When President Johnson called Middleton to discuss the release of the Pentagon Papers in 1971, LBJ proposed that his aides begin researching what it would take to open the Vietnam documents in the LBJ Library, Middleton said. Johnson asked Middleton to help former national security adviser Walt Rostow "prepare a rationale that I can give to President Nixon that will persuade (him) to send a team here to declassify our Vietnam papers."

Rostow and Middleton summed up their research in two memos that recommended asking Nixon to send eight policy and defense experts to the LBJ Library for up to two years to review documents. They estimated the library had 1.1 million pages of foreign affairs documents. Of those, the Pentagon Papers and other Vietnam documents numbered nearly half a million pages.

Rostow concluded his Jan. 2, 1973, memo to LBJ by offering "to draft the kind of memorandum you may wish to hand to President Nixon."

Then, on Jan. 13, 1973, Middleton attended a dinner party at the LBJ Ranch. Middleton said Johnson pulled him aside to say he wanted a face-to-face meeting with Nixon to seek declassification of the Vietnam War documents.

"I'm going to do that as soon as President Nixon is inaugurated," Johnson said that night. "I'm going to go to Washington and take it up with him."

"One week later, President Nixon was inaugurated for the second time," Middleton said. "Two days after that, President Johnson was dead."

There were 5 Presidents in Dallas that day:  Nixon LBJ Kennedy Bush41 and

Nixon's Three Stories of Where He Was on November 22, 1963

In the first place, strange things which could scarcely all be coincidence happened even before JFK was killed. On the morning of November 22, 1963, the day Kennedy was killed the New York Times carried an item on a back page, It was datelined Dallas. And it said that ex-Vice-President Richard M. Nixon had made a speech in Dallas before a group of businessmen,

Not only did the Times carry that story on the very day JFK died, but Nixon was in Dallas the day Kennedy died, and it is very possible that he was still in Dallas at the moment Kennedy died. Despite all other reports to the contrary. And of course the thing that makes this so very important is that Nixon and others have for some reason tried to conceal that fact for more than twelve years.

By itself, this would not be important. Being in Dallas on November 22nd. 1963 does not make just anyone. for example, Nixon, a murderer; but the record of Nixon's visit to Dallas has been deliberately obscured. Let's pick three "official" versions of Nixon's actions that day and see how they compare and then what the differences may signify.

Story One

Not long after Kennedy was shot, Nixon wrote an unusually long article for the Reader's Digest. It appeared in the November 1964 issue under the strange title, "Cuba, Castro, and John F Kennedy." Prepared as it was by Nixon or for his signature and prepared for the massive worldwide audience of the August Reader's Digest, we are asked to believe that this is the factual account of what took place. Nixon says

"I urged, in a statement to the press < Dallas on November 21 that the President and the vice-president be shown the respect to which their office entitled them." [br />
Nixon added,

"I boarded a plane in Dallas on the morning of November 22 to New York. We arrived on schedule at 12:56. I hailed a cab. We were waiting for a light to change when a man ran over from the street corner and said that the President had just been shot in Dallas. This is the way that I learned the news."

Story Two

Now let's look at another Nixon account of the same day The November 1973 issue of Esquire magazine carried the following Nixon quote;

"I attended the Pepsi Cola convention < in Dallas >and left on Friday morning. November 22, from Love Field. Dallas, on a flight back to New York , . . on arrival in New York we caught a cab and headed for the city the cabbie missed a turn somewhere and we were off the highway . . . a woman came out of her house screaming and crying. I rolled down the cab window to ask what the matter was and when she saw my face she turned even paler. She told me that John Kennedy had just been shot in Dallas,"

Story Three

Now let's look at the "official" account from "The Day Kennedy was Shot, by Jim Bishop:"

"At Idlewild Airport now JFK Airport) in New York , reporters and photographers had been waiting for the American Airlines plane among (the passengers) was Nixon. As he got off the plane he thought that he would give 'the boys' basically the same interview he had granted in Dallas . Nixon posed for a few pictures . . . got into a taxi-cab was barely out of the airport when one of the reporters got the message: The President has been shot in Dallas."


Now let's compare these. Nixon was in Dallas on November 22. The versions agree that he took some plane out in the morning Bishop says it was American Airlines and that it went into Idlewild. Nixon says that it landed precisely at 12:56 nearly one half-hour after Kennedy had been shot. Certainly the crew would have heard over their radio that the president had been shot and would have told their passengers. Then Bishop says reporters and photographers were there. Certainly they too would have known about Kennedy's murder by then. Everyone else in the world did. Bishop says the photographers took pictures. Where are they?

Nixon says he traveled to New York from Dallas with a friend. Who? And what is his story?

Nixon says he got in a cab, presumably well after 12:56. What cabbie in New York City would have not known the news by then? And then Nixon tells a strange story. The first time a man ran out to the cab with the news, and the second time the cab was "lost" and a woman ran out screaming and crying the news. These different accounts do not hold water.

With all of this very contrived series of accounts it looks as though someone has been fabricating a cover-up of Nixon's actions that day. Why?

The True Story

Actually, Nixon was in Dallas when JFK was shot. On April 2nd 1975 a young man was listening to a talk at his school when he heard the lecturer tell about the Esquire account of Nixon's trip to Dallas, and how and when Nixon had learned about JFK's death. That young man then told the lecturer, "My father was an executive for the Pepsi Cola Company, and he was in Dallas on November 22nd 1963 at that convention. He has told me that Nixon was there in Dallas at the convention when the announcement was heard that JFK had been killed, Nixon left later that afternoon,"

This young man is the son of Mr. Harvey Russel of the Pepsi Cola Company. When Mr. Russel was informed of his son's account, he agreed that his son's story was true. Mr. Russel confirmed that Nixon was attending that meeting at the time the shots were fired. He added Nixon was there representing the Pepsi Cola Company's law firm Mudge, Rose, Nixon et al. The Dallas newspapers stated that Nixon was attending a board meeting.

Mr. Russel confirmed that the session Nixon was attending broke up when the assassination news came through. Nixon then returned to his hotel and later in the afternoon had been driven to the Dallas airport by a Mr. Deluca, also a Pepsi Cola official.

These surprising series of events and the manner in which they unfolded after all these years underscore that there was something unusual about Nixon's visit to Dallas. Telephone calls to Deluca and again to Russel did little more than highlight their growing concern over the inadvertent disclosure of this story.
George Herbert Walker Bush?
Red Hering... Bush phoning in...   READ RUSS BAKER
Family of Secrets. The Bush Dynasty, America's Invisible Government, and the Hidden History of the Last Fifty Years
Barbara Bush: I was getting my hair done in Tyler, Texas, working on a letter
"The elder Bush cannot really remember where he was on November 22,

it reads:

At 1:45 p.m. Mr. George H. W. Bush, President of the Zapata Off-shore Drilling Company, Houston, Texas, residence 5525 Briar, Houston, telephonically furnished the following information to writer by long distance telephone call from Tyler, Texas.

BUSH stated that he wanted to be kept confidential but wanted to furnish hearsay that he recalled hearing in recent weeks, the day and source unknown. He stated that one JAMES PARROTT has been talking of killing the President when he comes to Houston.

BUSH stated that PARROTT is possibly a student at the University of Houston and is active in political matters in the area. He stated that he felt Mrs. FAWLEY, telephone number SU 2-5239, or ARLENE SMITH, telephone number JA 9-9194 of the Harris County Republican Party Headquarters would be able to furnish additional information regarding the identity of PARROTT.

BUSH stated that he was proceeding to Dallas, Texas, would remain in the Sheraton-Dallas Hotel and return to his residence on 11-23-63. His office telephone number is CA 2-0395.

Here, George Bush establishes a paper trail for himself of being in Tyler, Texas just moments after the shooting of the President. But interesting enough, he also gives the suspect an alibi as well.

The FBI investigated James Parrot and found him to be innocent and completely harmless. He had apparently made no such threats against the President or anyone else. Parrot lived at home with his mother. He had been discharged from the air force on psychological grounds and had a seventh grade education. He was self-employed as a sign painter. And importantly, he had two alibis—one was from his mother. She said he was home at the time of the shooting.

But here is the kicker—Parrot's second alibi comes from Bush campaign member Kearney Reynolds. It seems at the time Poppy was making his call to the FBI to report Parrot, Reynolds was sent to Parrot's house to tell him of the assassination and request a sign to be made for the campaign. So not only does George Bush create an alibi for himself but gives one to the man he is fingering as a suspect by using with one of his own associates!

James Parrot was given a soft landing. He never knows who accused him till years later. He even worked as a volunteer on Bush's 1992 presidential campaign not knowing the full extent of what happened. Bush claims to have never known Parrot but he would have to know more than he let on to send Reynolds to the guy's house to ask for campaign signage. After all, this was Poppy's suggestion.

Barbara Bush gets into this too in her memoirs. She includes a letter she claims to have written to her children in a Tyler beauty parlor the day of the assassination. It starts out "Dearest Family" but all of her children are under 10 years of age and the eldest, George W., is away in prep school. Also, she'll be home in a few days so by the time she would have mailed the letter they would have been home before the letter arrived. She makes no mention of Poppy's call to the FBI. In fact, the letter is rather bland but not without hopeful thoughts that a commie did it. She signs it "Bar" and not as "mother" or any maternal identifier as one would for small children. Nobody ever knows of this letter till it is published in her memoirs. It is unspecified if the letter was even mailed. So, if Poppy can't remember, Bar can.

Here we have George Bush providing cover for himself on this fateful day. But it raises the question; if he was not involved in the crime, then why go to such effort to create an alibi? He was running for Senator at the time, an unsuccessful bid that would have him loosing to Democrat Lloyd Benson. Poppy was deeply embedded with the Texas oil oligarchy. They were very antagonistic to Kennedy, even running hostile ads in the local Dallas paper the day of the assassination. (D. H. Byrd, a Texas oil businessman, and virulent Kennedy hater, owned the School Book Depository building.) Perhaps Poppy didn't want any blow-back from that if they came under tighter scrutiny?

Of course, the only other explanation was that George Bush was involved in a conspiracy.

It makes it even more interesting to consider that George Bush Sr. was, at least circumstantially, a CIA operative during this time. His business partner in Zapata Oil, Thomas Devine, was a CIA staff employee. This relationship dates as far back as 1953. We know this from a CIA memo. In 1985 Journalist Joseph McBride, while researching a piece for Daily Variety stumbled upon a document that would provide more fuel for the Kennedy assassination researchers. It was a memo written by FBI Director Hoover mentioning a briefing given to two individuals on November 29, 1963. One man was Capt William Edwards of the DIA and the other was George Bush of the CIA. Bush was CIA Director for one year, 1976-77 and denied ever being connected with the Agency prior to that. When questioned, the CIA said it was a different man, a George William Bush. McBride found the man in question who denied that he ever received such a briefing, as he was a GS-5 probationary civil servant—a night clerk. Poppy will answer no questions regarding this issue. (Vince Buglosi in his Reclaiming History End Notes says that the ARRB found no connection to Bush Sr. and that former CIA Director Allen Dulles had a Major General George Bush in his appointment calendar. Buglosi makes no determination on any of this. The ARRB simply didn't look into it deeply enough or else wanted to avoid a conflict.)

"If the American people knew what we have done, they would string us
up from the lamp posts." George H. W. Bush