Global Systemic Crisis: The Decimation of the Western Banks

Oct 17th 2011

Global Systemic Crisis: The Decimation of the Western Banks
The Myth of Economic Recovery


As anticipated by LEAP/E2020, the second half of 2011 is seeing the world continuing its unstoppable descent into global geopolitical dislocation characterized by the convergence of monetary, financial, economic, social, political and strategic crises.

After 2010 and early 2011 which has seen the myth of a recovery and exit from the crisis shattered, it’s now uncertainty that dominates the States’ decision-making processes just like businesses and individuals, inevitably generating increasing apprehension for the future. The context singularly lends itself: social explosions, political paralysis and / or instability, return to the global recession, fear over banks, currency war, the disappearance of more than ten trillion USD in ghost-assets in three months, widespread lasting and rising unemployment…

Besides, it’s this very unhealthy financial environment that will cause the “decimation (1) of Western banks” in the first half of 2012: with their profitability in freefall, balance sheets in disarray, with the disappearance of trillions of USD assets, with states increasingly pushing for strict regulation of their activities (2), even placing them under public supervision and increasingly hostile public opinion, now the scaffold has been erected and at least 10% of Western banks (3) will have to pass that way in the coming quarters.

However, in this environment, increasingly chaotic in appearance, trends emerge, the outlook sometimes appears positive… and most importantly, the uncertainty is much less than one might think, if only one analyzes the changes in the world within the framework of the world after the crisis rather than with the criteria of the world before the crisis.

In this GEAB issue, our team also presents its 2012-2016 “country risk” forecast for 40 States, demonstrating that one can depict the situations and identify strong trends through the current “fog of war” (4). In such a context, this decision-making tool is proving very useful for the individual investor as well as the economic or political decision-maker. Our team also presents the changes in the GEAB $ Index and its recommendations (gold-currencies-real estate), including of course the means to protect oneself from the consequences of the coming “decimation of Western banks”.

For this GEAB issue, our team has chosen to present an excerpt from the chapter on the decimation of Western banks in the first half of 2012.

First half of 2012: Decimation of Western banks
In fact, it will be a triple decimation (5) culminating in the disappearance of 10% to 20% of Western banks over the next year:

. a decimation of their staff
. a decimation of their profits
. and lastly, a decimation of the number of banks.

It will be accompanied, of course, by a drastic reduction in their role and importance in the global economy and directly affect banking institutions in other regions of the world and other financial operators (insurers, pension funds …).

An example of bank information at the time of a global systemic crisis Intesa SanPaulo’s stress test results compared to its European competitors (and compared to the first casualty: Dexia) (6)
Our team could address this issue like the Anglo-Saxon media, the president of the United States and his ministries (7), Washington and Wall Street experts and, on a wider basis, mainstream media (8), have done recently over all aspects of the global systemic crisis, that’s to say by saying, “It’s Greece and the Euro’s fault!” It would obviously be a virtue to reduce this part of the GEAB to just a few lines and suppress any hint of analysis of the possible causes in the US, the UK or Japan. But, coming as no surprise to our readers, it won’t be LEAP/E2020’s choice (9). As the only think tank to have anticipated the crisis and rather accurately foreseen its various phases, we’re not now going to give up an anticipation model that works well, benefitting from prejudice without any predictive power (Don’t let’s forget that the Euro is still alive and well (10) and that Euroland has just completed the small feat of, in six weeks, putting together the 17 parliamentary votes needed to strengthen its financial stabilization fund (11)). So, instead of echoing the propaganda or “readymade thought” let’s remain faithful to the method of anticipation and stick to a reality that we must uncover in order to understand it (12).

In this case, for ages, when one thinks of “banks” one thinks first of all of the City of London and Wall Street (13). And with good reason, London for over two centuries and New York for nearly a century have both been the two hearts of the international financial system and the lairs par excellence of the world’s major bankers. Any global banking crisis (as any major bank event), therefore, begins and ends in these two cities since the modern global financial system is a vast process of incessant wealth recycling (virtual or real) developed by and for these two cities (14).

The decimation of the Western banks that begins and will continue in the coming quarters, an event of historic proportions, cannot therefore be understood without first of all measuring and analyzing the role of Wall Street and London in this financial debacle. Greece and the Euro will undoubtedly play a role here as we have discussed in previous GEAB issues, but these are triggers: Greek debt is yesterday’s banking venality that is exploding in the public arena today; the Euro is the arrow of the future that is piercing the current financial balloon. These are the two fingers that highlight the problem, but they aren’t the problem. This is what the wise man knows and the fool doesn’t, to paraphrase the Chinese proverb (15).

In fact, one only needs to look at London and Wall Street to anticipate the future of Western banks, since it’s quite simply there that the banking flock gathers together to come and drink its dollar dose every evening. And the condition of the Western banking system can be measured through changes in bank staff numbers, their profitability and their shareholders. From these three factors one can directly deduce their ability to survive or disappear.

The decimation of bank staff numbers
Let’s begin with the numbers then! Here the picture is bleak for banking sector employees (and now even for the “banking system stars”): since mid-2011 Wall Street and London have continuously announced mass layoffs, spread by the secondary financial centers such as Switzerland and Euroland and Japanese banks. A total of several hundreds of thousands of banking jobs that have disappeared in two waves: first of all in 2008-2009, then since the late spring of this year. And this second wave is gradually gaining momentum as the months go by. With the global recession now under way, the drying up of capital flows to the United States and the United Kingdom as a result of the geopolitical and economic changes under way (16), the huge financial losses in recent months, and all kinds of regulations which gradually “break” the super-profitable banking and financial model of the 2000s, the heads of major Western banks have no choice: they must, at any price, cut their costs as quickly as possible and deeply. Therefore, the simplest solution (after that of overcharging clients) is to lay off tens of thousands of employees. And that’s what is happening. But far from being a controlled process, we see that every six months or so Western bank leaders find that they had underestimated the extent of the problems and are therefore obliged to announce further mass layoffs. With the political and financial “perfect storm” looming in the U.S. for next November and December (17), LEAP/E2020 anticipates a new series of announcements of this kind from early 2012. The “cost-killers” in the banking sector have some good quarters in front of them when we see that Goldman Sachs, which is also directly affected by this situation, reduced to limiting the number of green plants in its offices to save money (18). Although, after eradicating the green plants, it’s usually the “pink slips” (19) that flower.

The decimation of the number of banks
In a way, the Western banking system looks increasingly resembles the Western steel industry of the 1970s. Thus the “ironmasters; thought they were the masters of the world (incidentally actively contributing to the outbreak of World Wars); just like our “major merchant bankers” thought they were God (like Goldman Sachs CEO) or at least masters of the universe. And the steel industry was the “spearhead”, the “absolute economic example” of power for decades. Power was counted in tens of millions of tons of steel just like the power of billions in bonuses for merchant bank executives and traders in recent decades. And then, in two decades for the steel industry, in two / three years for the banks (20), the environment has changed: increased competition, collapsing profits, massive layoffs, loss of political influence, the end of massive subsidies and ultimately nationalization and / or restructuring giving birth to a tiny sector compared to what it was at its heyday (21). In a sense, therefore, the analogy applies to what awaits the Western banking sector in 2012/2013.

Share price changes (and, therefore, losses) for the British taxpayer following the partial government takeover of RBS and Lloyds – Source: Guardian, 10/2011
Already on Wall Street in 2008, Goldman Sachs, Morgan Stanley and JP Morgan had to suddenly turn themselves into “bank holding companies” to be saved. In the City, the British government had to nationalize a whole swathe of the country’s banking system and to this day the British taxpayer continues to bear the cost because the banks’ share prices have collapsed again in 2011 (22). This is also one of the Western banking system’s characteristics as a whole: these private financial players (or market listed) are worth practically nothing. Their market capitalization has gone up in smoke. Of course this creates an opportunity for nationalization at low cost to the taxpayer from 2012 because it’s the choice that will be imposed on States, in the United States as in Europe or Japan. Whether it be, for example, Bank of America (23), CitiGroup or Morgan Stanley (24) in the United States, RBS (25) or Lloyds in the United Kingdom (26), Société Générale in France, Deutsche Bank (27) in Germany, or UBS (28) in Switzerland (29), some very large institutions “too big to fail” will fail. They will be accompanied by a whole swathe of medium or small banks such as Max Bank which has just filed for bankruptcy in Denmark (30).

Faced with this “decimation”, States’ resources will be quickly overrun, especially in these times of austerity, low tax revenues and the political unpopularity of the bank bailout (31). Political leaders will, therefore, have to focus on protecting the interests of savers (32) and employees (two areas full of electoral promise) instead of safeguarding the interests of bank executives and shareholders (two areas full of electoral pitfalls, whose precedent in 2008 demonstrated its economic futility (33)). This will result in a new collapse in financial stock prices (including insurance, considered very “close” the banking situation) and increase hedge funds, pension funds (34) and other players’ turmoil traditionally closely intertwined with the Western banking sector. No doubt this will only strengthen the general recessionary environment by limiting loans to the economy just as much (35).

Global public debt (1990-2010) (as a % of GDP, constant 2010 exchange rates) – Sources: BRI / McKinsey, 08/2011
To simplify the view of this development, one can say that the Western banking market, significantly reducing its scope and the number of players in this market, has to downsize proportionally. In some countries, especially those where the very large banks account for 70% or more of the banking market, it will inevitably lead to the disappearance of one or another of these very large players … whatever their leaders, stress tests or rating agencies say (36). If you are a shareholder (37) or customer of a bank that may collapse in the first half of 2012 there are, of course, precautions to take. We offer a number in the recommendations in this issue. If one is an officer or employee of such an institution, things are more complicated because we now think it’s too late to avoid serial bankruptcies; and the banking job market is saturated because of massive layoffs. However, here is a piece of advice from our team if you are an employee in any of these institutions, if you are made an interesting offer of voluntary redundancy, take it as the next few months, the redundancies won’t be voluntary and will be under much less favorable conditions.

(1) Decimation was a Roman military punishment by death of one legionnaire in ten when the army had shown cowardice in battle, disobedience or inappropriate behavior. The Roman system of decimation worked by drawing lots.

(2) Regulations that severely excise the banks’ most profitable activities. Source: The Independent, 12/10/2011

(3) Our team believes the percentage to be somewhere between 10% and 20%.

(4) Fog of war to which the mainstream media incidentally contribute to a great extent instead of trying to clarify the situation.

(5) Considering decimation in its widest sense, that’s to say a sharp decrease can be much more than the Roman era’s 10%.

(6) As far as LEAP/E2020 is concerned, this type of classification presages nothing since the current shock is much higher in intensity and duration than the assumptions of the stress tests. And this equally applies to the US banks of course.

(7) Taking everything into account regarding Barack Obama, in difficult position for the next presidential elections because of his disastrous economic record and the deep disappointment of most of those who voted for him in 2007 because of his many broken promises, he must at all costs try to blame anyone or anything for the disastrous state of the economy and American society. So why not Greece and the Euro? When that doesn’t work anymore (in a couple of months), it will be necessary to find something else, but short-sighted management is an Obama administration specialty; no doubt his Treasury Secretary Timothy Geithner, the faithful Wall Street link, will find another explanation. In any case, it’s not Wall Street’s fault, we can at least be certain of that. Otherwise, the Obama administration will always bring out the “specter of Iran” to try and divert attention from the United States internal problems. Incidentally, this seems to be the current situation with the cock-and-bull story of the attempted assassination of the Saudi ambassador to Washington by Mexican drug traffickers paid by Iranian intelligence. Even Hollywood would balk at the improbability of such a scenario, but to save the “Wall Street” soldier and try to be re-elected, isn’t it worth a try? Sources: Huffington Post, 26/07/2011; NBC, 13/10/2011

(8) This mainstream media (financial or general) have, in fact, a brilliant history in anticipating the crisis. You certainly remember their 2006 headlines warning you against the 2007subprime crisis, announcing the Wall Street “implosion” of 2008 and, of course, in early 2011 telling you of a major return of the crisis in summer 2011! No, you don’t remember? Don’t worry, your memory is good … because they never made the headlines, they never warned you of these major events and their causes. So, if you continue to think that, as they repeat every day, the current problems are caused by “Greece and the euro”, it’s that you think they have suddenly all become honest, intelligent and insightful … and you must therefore also believe in Father Christmas in the same sense. It’s beguiling, but not very effective for facing the real world.

(9) For a long time, our team has been underlining the European difficulties, anticipating rather correctly the evolution of the crisis on the « Old Continent ». But we try not to fall victim of the syndrom of the European tree that hides the forest of major US and UK problems.

(10) A bit of education: those who bet on a Euro collapse a month ago have lost money again. To the rhythm of “the end of the Euro crisis” roughly every 4 months, they won’t have much left by 2012. Whilst the United States for example have not been able to demonstrate their ability to overcome the opposition between Republicans and Democrats on the control of their deficits.

(11) Whilst the United States, for example, have not been able to demonstrate their ability to overcome Republican and Democrat opposition on the control of their deficits.

(12) It’s appalling to see the G20’s preoccupation with the Euro whilst the central issue of the future is the Dollar. Obviously, the huge media manipulation operation launched by Washington and London will have succeeded once again in deferring, for a time, the inevitable questioning of the US currency’s central status. As anticipated by our team, one can expect nothing from the G20 until the end of 2012. It will continue to talk, pretend to act and to actually ignore the key issues; those are the hardest to put on the table. The recent announcements of an increase in resources for the IMF are a part of these empty words that will not be acted upon because the BRICS (the only ones able to augment IMF funds) will not finance an institution in which they continue to only have marginal influence. Meanwhile, these announcements make believe that there is still a shared commitment to international action. The alarm will be all the more painful in the months to come.

(13) If you think of Greece it’s because you are Greek or that you are a manager of shareholder of a bank which has lent too much to the country over the last ten years

(14) And in a way also for the two States involved. But this is already a moot point, and widely discussed for that matter, to know if such financial markets are a blessing or a curse for the States and people that host them.

(15) “When a finger is pointing at the moon, the fool looks at the finger”

(16) Between Euroland’s increasing integration which deprives the City of lucrative markets and closer economic, financial and monetary ties with the BRICS, bypassing Wall Street and the City, they are growing shares of the global financial market escaping London and New York banks.

(17) See GEAB N°57

(18) Source: Telegraph, 19/08/2011

(19) In the United States the « pink slip » is a pink form indicating layoff. Source: Wikipedia

(20) It takes more time to relocate heavy industry than a trader’s desk.

(21) This is, more or less, the procedure followed in the United States and Europe.

(22) See chart above.

(23) Bank of America is definitely at the confluence of major and growing problems: a lawsuit against it claiming $50 billion for concealing losses on the acquisition of Merrill Lynch in late 2008, a massive grassroots rejection by customers following its decision to impose a $5 per month cost for cash cards, a long and unexplained crash of its website; series of trials over subprime involving individual owners and local authorities, and a threat to place Countrywide in bankruptcy, another of its acquisitions in 2008, to limit its losses. According to LEAP/E2020, it embodies the ideal US bank for a crash scenario between November 2011 and June 2012. Sources: New York Times, 27/09/2011; ABC, 30/09/2011; Figaro, 29/06/2011; CNBC, 30/09/2011; Bloomberg, 16/09/2011

(24) The US bank which, in 2008, received the largest slice of public financial support and which, once again, is panicking the markets. Sources: Bloomberg, 30/09/2011; Zerohedge, 04/10/2011

(25) One of the most vulnerable banks in Europe. Source: Telegraph, 14/10/2011

(26) Which itself is also seeing the hour of the cut in its credit rating approach. Source: Telegraph, 12/10/2011

(27) The leading German bank, which is already exposed to a cut in its credit rating. Source: Spiegel, 14/10/2011

(28) UBS is also on the road to a cut in its credit rating. Source: Tribune de Genève, 15/10/2011

(29) Société Générale, Deutsche Bank and UBS have a point in common of particular concern: all three rushed to the US “El Dorado” during the last decade, investing like drunken sailors in the US financial bubble (Deutsche Bank in subprimes, as Société Générale in CDS and UBS in tax evasion). Today, they don’t know how to exit this maelstrom that increasingly drives them to the bottom each day. In passing, we recall that in 2006, we recommended that European financial institutions free themselves from US markets as soon as possible, which appeared very dangerous to us.

(30) Source: Copenhagen Post, 10/10/2011

(31) Even the BBC, certainly marked by the UK riots in summer 2011, asks itself a question, “unthinkable” just a year ago for this type of media: can the United States expect social unrest? To ask the question is to answer it. And in Europe, a country like Hungary, with Social-Nationalist government, directly accused the banks, especially foreign ones, of being responsible for the crisis facing the country. Source: BBC, 20/09/2011; New York Times, 29/10/2011

(32) Of which an increasing number have begin to rebel against banking system practices, especially in the United States where Wall Street rejection is growing exponentially, weakening major US banks on a daily basis. Sources: CNNMoney, 11/10/2011; MSNBC, 10/11/2011

(33) And it’s even worse than economic futility since a recent study had shown that banks that received public financing were subsequently shown to be the most prone to make risky investments.Source: Huffington Post, 16/09/2011

(34) US public pension funds are now facing a financial chasm estimated at between one and three trillion USD. Will the US public authorities choose to save the banks or their retirees? Because they will soon have to choose. Source: MSNBC, 23/09/2011

(35) Source: Telegraph, 02/10/2011

(36) None of these banks are able to withstand the global recession and the implosive melding of financial assets that will prevail in the coming months.

(37) We could have also developed the point that we are witnessing a process of “bank shareholder decimation”

Global Research Articles by GEAB



2 responses to “Global Systemic Crisis: The Decimation of the Western Banks




    in Russia and the USA
    Including the Banking Connections
    Between New York Jews Financing the Red Revolution

    The Jewish Communal Register” of 1917 – 1918, published by the Kehillah (Jewish communal government) states that Russian immigrant Jews brought “socialism” (meaning “Communism”) to America. It is important to note that the most violent organization involved in the overthrow of the Czar of Russia was The Jewish Bund, headed by Abramovitch and Lieber. The three other revolutionary parties included the all-Jewish Mensheviks (headed by Martov and Dan), the Social Democrats, a front for Gentiles but headed by the Jew Danishevsky and The Bolsheviks headed by Lenin who has only recently been revealed to be of Jewish descent. Note that the Bund sent money back to their comrades in Russia. More important is the remark that the failed revolution of 1905 in Russia caused “a great influx” of Jews to immigrate to the U.S. The truth is that over one million Marxist Jews flooded into the U.S.

    Jews Assassinate Tzar

    “The Pale of Settlement” as the vast area of Russia in which over ten million Jews were required to live. This order was issued by the Czar in 1772 because of the Jews’ sharp business practices which had brought much misery upon the Christian population. The “Pale” included all of the Ukraine, western Russia, all of Poland and Lithuania. Thus the Jews were banned from St. Petersburg, Moscow, and Kharkov. Even though the Jews flourished, they were not satisfied and wanted to be able to dominate all of Russia. Thus they formed the “Social Revolutionary Party” to overthrow the Czar.

    On March 13, 1881 the Jew Grinevetsky threw the bomb which killed Czar Alexander II. In 1901 they assassinated Bogolepov, the Czar’s Minister of Education. They murdered Sipyagin, Minister of Interior in 1902, Bogdanovich, Governor of Ufa in 1903, Premier von Plehve in 1904, Grand Duke Sergei the Czar’s uncle in 1905, Gen. Dubrassov in 1906 (his soldiers put down the Jewish revolution of 1905.). Peter Stolypin, the Prime Minister, offered vast new tracts of land to the peasants which threatened the Communist Jews of their base of support among poor Gentiles. Thus the Jew terrorist, Mordecai Bogrov, assassinated Stolypin in September 1911. He shot him in the back of the head during a gala in Kiev attended by the Czar and his Court. The Jew tailor Yevno Azev was convicted of heading the assassination squads and executed in 1911. He was also a founder of the Social Revolutionary Party.

    Jews Exploit Christians

    The new Tzar, Alexander III, was so infuriated with the Jews that he issued the following statement which is quoted from the Encyclopedia Britannica, page 76, Vol. 2, 1947 edition:


    “For some time the government has given its attention to the Jews and to the* relations the rest of the inhabitants of the empire, with a view of ascertaining the sad condition of the Christian inhabitants brought about by the conduct of the Jews in business matters. During the last 20 years, the Jews have gradually possessed themselves of not only every trade and business in all its branches, but also of a great part of the land by buying or farming it. With few exceptions, they have as a body devoted their attention, not to enriching or benefiting the country, but to defrauding, by their wiles, its inhabitants, and particularly its poor inhabitants ! This conduct of theirs has called forth protests on the part of the people, as manifested in acts of violence. The government, while on the one hand doing its best to put down the disturbances and to deliver the Jews from oppression and slaughter, has also on the other hand, thought it a matter of urgency and justice to adopt stringent measures in order to put an end to the oppression practiced by the Jews on the inhabitants, and to free the country from their malpractices, which were. as is known, the cause of the agitation.”

    (Note: Thus the so-called ” pogroms” by Christians against the Jews were brought on by the Jews themselves!)

    Jewish Bankers Finance Revolution In Russia

    American Jacob Schiff was the wealthiest Jewish banker in the world as head of the international bank of “Kuhn, Loeb & Co.” Note here that Schiff “floated the large Japanese War Loans of 1904-1905 which made their victory over Russia possible”. At the end of the article we read that Schiff “used his financial influence to keep Russia from the money markets of the U.S.” Also note that Schiff controlled all of the railroads in the U.S. and “suppressed ruinous competition.” [Note: This would be like allowing one person to own all of the Air Lines today and “suppressing all competition.” He also controlled the Central Trust Bank and Western Union.). Thus, with all this money power, Schiff was able to prevent the Czar from obtaining loans to raise armies for a defense against the Japanese. Schiff formed called “The Friends of Russian Freedom.” Its purpose was to agitate for the overthrow of the Christian Czar. This group, with the help of the Japanese, ran an anti-Czar indoctrination campaign among the 50,000 Russian soldiers taken as POWs during the war. They returned home ready to support the Jewish revolution.

    The first “Soviet” seized control of the city of St. Petersburg on March 14, 1917, while the nation was in turmoil over their defeats by the Germans during World War One. “The New York Times” of March 24, 1917, reports that Jacob Schiff sent the following telegram to members of his “Friends of Russian Freedom”: “Will you say for me to those present at tonight’s meeting how deeply I regret my inability to celebrate with the Friends of Russian Freedom the actual reward of what we had hoped and striven for these long years.” (Schiff was obviously referring to the spreading Communist revolution in Russia.)

    Quote from “Jewish Communal Register”, 1918:

    Title: Schiff Finances Enemies Of Czar

    Kehillah (Jewish Community) of New York City 356 SECOND AVENUE New York City

    “Schiff, Jacob Henry, was born In 1847, at Frankfort on-the- Maine, Germany. He received his education in the schools of Frankfort. In 1866 he came to America, where he settled in New York City. Here, he joined the staff of a banking house. In 11173, he returned to Europe where he made connections with some of the chief German banking horses. Upon returning to the United States, he entered the banking firm of Kuhn, Loeb and Company, New York of which he later became the head. His firm became the financial reconstructors of the Union Pacific Railroad, and since then is strongly interested in American railroad”

    Mr. Schiff’s principle of “community of interests among the chief railway combinations led to the formation of the Northern Securities Company, thus suppressing ruinous competition. The firm of Kuhn, Loeb & Co.. floated the large Japanese War Loans of 1904-5, thus making possible the Japanese victory over Russia Mr. Schiff is director of numerous financial companies, among them the Central Trust company. Western Union Telegraph Company, the Wells Fargo Express Company. He has been severer time vice-president of the New York Chamber of Commerce.

    Mr. Schiff has always used his wealth and his influence in the best interests of his people. He financed the enemies of autocratic Russia and used his financial influence to keep Russia from the money market of the United States.

    When last year, Mr. Schiff celebrated his seventieth birthday, all the factions of Jewry in the United States and elsewhere united in paying tribute to him.

    [end quote]

    Trotsky and Schiff

    Leon Trotsky (real name: Bronstein) was exiled from Russia and came to New York City on January 13, 1917. The Russian Jews who owned Vitagraph Movie Studies in Brooklyn gave Trotsky a job. He appeared in three films including “My Official Wife” starring Clara Kimball Young. Ironically, Trotsky played the part of a Russian revolutionary.

    While in New York, Trotsky met with Schiff who saw in him the perfect revolutionary. Schiff had his “Friends of Russian freedom” locate 267 other Yiddish speaking Russian Jew exiles. He arranged for President Woodrow Wilson to give them U.S. passports so they could not be refused entry into Russia. Also, Schiff gave Trotsky $10 million (that is in 1917 dollars, which today would be worth hundreds of millions). Later Schiff would transfer another $15 million to Lenin.

    [quote from “The Jewish Communist Register” of New York’s Kehillah
    (community government), 1918. Edition.]

    “THE JEWISH SOCIALIST FEDERATION OF AMERICA” By Frank F. Rosenblatt, Chief of staff, Bureau of Philanthropic Research.

    “The birth of the Jewish Socialist Federation in 1912 must be recognized as the moat important landmark in the history of the Jewish Socialist movement in this country. The Federation was the outgrowth of a previous organization, the Jewish Socialist Agitation Bureau. which for a period of seven years led a precarious and inconsequential existence. The Agitation Bureau was organized at a time when the idea of Jewish nationalism began to spread its roots in the minds of the Jewish workmen. It is to the glory of the Jewish Socialist Bund in Russia that the question of nationalism, which in the minds of the Socialists of the older generation was synonymous with oppression and subjection, was forced into the foreground. The idea became ever more popular that nationalism and internationalism are by no means mutually exclusive teens, and that genuine internationalism is possible only when all nations are guaranteed full and equal rights.”

    Jewish Bund Organizes In U.S.

    The heroic fight of the Bund against the old Russian autocracy caused thousands of its members and followers many of them exiles to Siberia or under rigid surveillance by the gendarmes, to flee to this country! But they would not resign themselves to inactivity, and as a result a net of Bund branches was spread throughout the United States and Canada. For a number of years these branches, whose primary object was to collect funds for the Bund in Russia, were the most active and influential bodies in the Jewish radical world. Their members formed the vanguard of the Workmen’s Circle (Arbeiter Ring).

    This anomaly became particularly striking after the great influx of political refugees which the abortive Russian revolution of 1905 had swept to these shores.

    Zionist-Socialism however, was enriched by an extraordinary new force: B. Boruchev, he introduced a theory which was necessarily very popular among the Jewish masses, who were at that time Socialistic through and through. He contended that only though a land of their own in Zion could the Jewish people have a proletariat, and that Zionism ought therefore to join forces with Socialism. Zionism thus received a Marxist basis, and appealed strongly to the masses.

    Boruchov, with the assistance of other intellectual comrades — a number of them students took charge of number of periodicals in Russian and Yiddish, which the Russian Government suppressed one after the other. (In Russian: “The Jewish Workmen’s Chronicle” and “The Hammer”; In Yiddish: “The Proletarian Idea,” the “Forward,” and an edition of books called the “Hammer.”)

    (Jewish Communal Register” 1918 continued)

    Beginning of “International Communism”

    At the name time that the party was organized in Russia, sister societies were organized in America, in Austria, in England, and, finally, in Palestine.

    The Poale-Zion were, , however, recognized as a part of the Socialist party in Turkey, which gave the party the possibility of introducing the international Socialist movement in favor of Zionism and the Jewish national aims.

    The most important achievement of Poale-Zion in Palestine was the organization of Ha-Shomer (The Watchman), an organization of heroic young guards who protect the property of the colonies with their lives against thieving Arabs.

    In 1907, during the Zionist congress at The Hague. delegates of the Poale-Zion parties of various countries assembled at a conference and organized the Poale-Zion Weltverband (“World Organization”) which watches over the international interests of the Poale-Zion in the Zionist and the Socialist worlds. Fund, which is collected from Jews all over the world, is administered by the “World Organization.”

    Through its propaganda in the Socialist International and the English Labor Party the organization” has succeeded in securing a favorable attitude towards Zionist alma on the part of Socialists and labor leaders As a result, a Jewish home in Palestine is one of the points in the peace program of the “International” and of the English Labor Party.

    The Poale-Zion In America

    In the far-reaching work of the international Poale-Zion movement, the “Jewish Socialist Labor Party Poale Zion” of America plays the most important role after the Palestine party. The Russian reaction of 1906-1917 caused the real centre of the movement to shift to America.

    “World Organization” presented a Memorandum (“The Red Book”) to the Socialist International.

    [end quote]

    Zionism is Marxism

    Russia’s Jewish population supported one of the four Marxist Parties. However, many supported Theodore Herzl and his new Zionist movement. Herzl’s plan was to found an all-Jewish Marxist state in some foreign underpopulated land. Herzl considered Kenya and Madagascar in Africa, Palestine and Sinai just below the present Israel.

    Note that the Jewish Communal Register clearly states that Zionism is a Marxist movement. When they took over the city of Haifa in Palestine it became known as “Red Haifa”. Every May Day the Jews would march through the streets with their clenched fists held high and the Red flag flying. The Soviets were the first to smuggle weapons to the Zionists so that they could wage an underground war against the British and later against the Arabs.

    Jewish Bankers Unite Behind Communism

    The U.S. Foreign Relations Committee of 1918 released a report on the international Jewish banks which were financing Communism. In each case they were banks owned by Jews. The Jew Olof Aschberg of Sweden’s “Nya Banken” is referred to as “The Bolshevik Bank”. Note that this bank “is financed in America by the Guarantee Trust Co.” This bank was controlled by Jacob Schiff.

    Jewish Communism in U.S.

    As the Russian Jewish refugee population grew in the U.S. so did their radical Marxist groups. Note the “Communal Register” again. IT lists the four main Jewish “radical organizations”. Their unity meeting took place in 1915 just two years before the Communist Revolution in Russia. We read: “The revolution in Russia, having at a single stroke, emancipated the Jews of that country.”

    U.S. Communist Party founded By Russian Jews

    [quote from “Jewish Communal Register,” 1918]:

    The Four Groups Which Founded The U.S. Communist Party

    The National Workmen’s Committee was organized in the early part of 1915, by representatives of the four leading radical organizations, viz.: The Workmen’s Circle, the United Hebrew Trades, the Jewish Socialist Federation of America, and the Forward Association.

    The revolution in Russia having at a single stroke emancipated the Jews of that country, the Committee, _ . _ .though continuing its study of the Russian situation, has largely concentrated its attention upon the Romanian Jewish problem and is now engaged, in cooperation with various European organizations, in dealing with it.

    [end quote]

    “The Roots of American Communism” by Theodore Draper, can be ordered from your local bookstore for $11.95. This is a detailed account of the founding of the U.S. Communist Party. Excerpt from the book:


    “Most of the others in the up-and-coming New York Group were more or less of similar background. They included Dr. Maximilian Cohen, a dentist; Joseph Brodsky, a lawyer, and his brother Carl; Rose Wortis, a dressmaker; and Harry M. Winitsky. They had a number of things strikingly in common; almost all were in their twenties, some in their very early twenties; they were mostly Jewish; they came over from Russia as children or were first-generation Americans of Russian Jewish parents; they became active in the Socialist movement in their late teens and were generally about twenty or a little older at the time of the Russian Revolution.”

    [end quote]

    The overwhelming majority of its leaders were Russian Jews. They were under the direction of the Soviets who also financed them. The chief Jewish leaders were Bertram Wolfe, who operated under the Christian name Albright. He served on the Communist Part USA National Council. The German born Jew, Max Bedacht, represented the Communist Part USA at Comintern meetings in Moscow under the Gentile name James A. Marshall. Israel Amter, a well known pianist, ran the ‘Workers Party”-a Communist Part USA front group.

    Amter went under the name J. Ford. In 1917 Benjamin Gitlow, of Russian Jewish parents, was one of the first Communists elected to office (as state Assemblyman from the Bronx). As late as 1945 the Communist Party had two members on the New York City Council. Both were elected from Jewish areas of the city. Two Jews born in Russia were William Weinstone, (of the Communist Part USA Central Executive Committee) and Jay Lovestone, (editor of “The Communist” magazine).

    Mike Gold was editor of “New Masses.” Alexander Bittelman served on the Central Executive Committee of Communist Part USA and as editor of the Yiddish Communist Part USA daily newspaper, “Freiheit”. Alexander Trachtenberg fought in the failed 1905 revolution against the Czar. He fled to the U.S. and headed the front group, “Friends of the Russian Revolution. Louis Fraina, a Jew born in Italy, was the chief organizer of the original U.S. Communist Party. He operated under the name Ralph Snyder.

    Majority of Communist Party Members Were Jews

    Draper writes that the first daily newspaper of the Communist Party was the Yiddish “Freiheit” launched on April 22, 1922. It would be two more years before they would start a paper for Gentiles. The famous ex-Communist Whittaker Chambers, (who exposed Alger Hiss as a Soviet spy), was an early editor of The Daily Worker. He wrote that the party held separate meetings for “English speakers” and for Yiddish speakers (Jews). Chambers said that the Yiddish meetings were always the largest ! They were called “foreign language groups.”

    Whitaker Chambers former editor of ‘The Daily Worker ” said that two Jewish college professors recruited him into the Communist Party. Chambers also said that Jews made up the largest bloc in the party.

    Draper writes that fewer than 25% of the members were born in the U.S. and only about 10% spoke English only. This proves that its foreign makeup had to be mainly Jewish. One reason being that all Gentile East European immigrants were strongly anti-Communists.

    The Communist Party membership built up to over 100,000 by 1939 and from 50% to 75% were Jews. A/so, 25,000 members lived in New York City and this group was almost entirely Jewish. (Hundreds of thousands of other Marxist Jews supported the party and were known as “Fellow Travelers. ” The party controlled several labor unions including the “Ladies Garment Workers Union” which was made up of some 6,000 Jewish women. They were all Communist Party supporters.

    The power of the Communist Party was demonstrated at the Sept. 1921 convention of the Socialist Party. Draper writes: “The final blow to the Socialist Party was the defection of the Jewish federation at a convention in Sept. 1921. The entire group defected to the Communist Party. The Socialist Party membership fell to its lowest point 11,019.”

    Jewish Communists Today

    The Jewish leaders of the Communist Part USA were always very careful to choose Gentiles as the “pubic heads” of the party. The first was William Z. Foster, then Earl Browder, Eugene Dennis and today, Gus Hall. Reading the “Communist Weekly Word” easily reveals their support of the Democratic Party and Clinton. Communists say that they have “found a new home” in the Democratic Party. In fact, Clinton has appointed three people to senior positions who have been connected with the Communist apparatus Arnold Leese. a great British expert on the Jewish problem wrote in 1938: “When the Jews leave Russia Communism will collapse.” World Jewry is today relocating in America. Thus the real threat of Communism in our country has just begun.

    Communism is not dead by any means and in fact is far more of a threat today than ever before. The Communist Part USA infiltration of the Democratic Party has been a meticulous operation. Herein lies the present danger of a Communist takeover of America under the name of their newest communist front which is the modern National Democratic Party.

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