Global Banking:
The Bank for International Settlements
Part 1 of 2
Wednesday, October 19, 2005
By Patrick M. Wood
NewsWithViews.com
Preface
When
David Rockefeller and Zbigniew Brzezinski founded the Trilateral Commission
in 1973, the intent was to create a "New International Economic Order"
(NIEO). To this end, they brought together 300 elite corporate, political
and academic leaders from North America, Japan and Europe.
Few
people believed us when we wrote about their nefarious plans back
then. Now, we look back and clearly see that they did what they said
they were going to do... globalism is upon us like an 8.6 magnitude
earthquake.
The
question is, "How did they do it?" Keep in mind, they had no public
mandate from any country in the world. They didn't have the raw political
muscle, especially in democratic countries where voting is allowed.
They didn't have global dictatorial powers.
Indeed,
how did they do it?
The
answer is the Bank for International Settlements (BIS), self-described
as the "central bank for central bankers", that controls the vast
global banking system with the precision of a Swiss watch.
This
report offers a concise summation of BIS history, structure and current
activities.
Introduction
The
famous currency expert Dr. Franz Pick once stated, "The destiny of
the currency is, and always will be, the destiny of a nation."
With
the advent of rampant globalization, this concept can certainly be
given a global context as well: "The destiny of currencies are, and
always will be, the destiny of the world."
Even
though the BIS is the oldest international banking operation in the
world, it is a low profile organization, shunning all publicity and
notoriety. As a result, there is very little critical analysis written
about this important financial organization. Further, much of what
has been written about it is tainted by its own self-effacing literature.
The
BIS can be compared to a stealth bomber. It flies high and fast, is
undetected, has a small crew and carries a huge payload. By contrast,
however, the bomber answers to a chain of command and must be refueled
by outside sources. The BIS, as we shall see, is not accountable to
any public authority and operates with complete autonomy and self-sufficiency.
Leading
up to Founding
As
we will see, the BIS was founded in 1930 during a very troubled time
in history. Some knowledge of that history is critical to understanding
why the BIS was created, and for whose benefit.
There
are three figures that play prominently in the founding of the BIS:
Charles G. Dawes, Owen D. Young and Hjalmar Schacht of Germany.
Charles
G. Dawes was director of the U.S. Bureau of the Budget in 1921, and
served on the Allied Reparations Commission starting in 1923. His
latter work on "stabilizing Germany's economy" earned him the Nobel
Peace Prize in 1925. After being elected Vice President under President
Calvin Coolidge from 1925-1929, and appointed Ambassador to England
in 1931, he resumed his personal banking career in 1932 as chairman
of the board of the City National Bank and Trust in Chicago, where
he remained until his death in 1951.
Owen
D Young was an American industrialist. He founded RCA (Radio Corporation
of America) in1919 and was its chairman until 1933. He also served
as the chairman of General Electric from 1922 until 1939. In 1932,
Young sought the democratic presidential nomination, but lost to Franklin
Delano Roosevelt.
More
on Hjalmar Schacht later.
In
the aftermath of World War I and the impending collapse of the German
economy and political structure, a plan was needed to rescue and restore
Germany, which would also insulate other economies in Europe from
being affected adversely.
The
Versailles Treaty of 1919 (which officially ended WWI) had imposed
a very heavy reparations burden on Germany, which required a repayment
schedule of 132 billion gold marks per year. Most historians agree
that the economic upheaval caused in Germany by the Versailles Treaty
eventually led to Adolph Hitler's rise to power.
In
1924 the Allies appointed a committee of international bankers, led
by Charles G. Dawes (and accompanied by J.P. Morgan agent, Owen Young),
to develop a plan to get reparations payments back on track. Historian
Carroll Quigley noted that the Dawes Plan was "largely a J.P. Morgan
production"[1]
The plan called for $800 million in foreign loans to be arranged for
Germany in order to rebuild its economy.
In
1924, Dawes was chairman of the Allied Committee of Experts, hence,
the "Dawes Plan." He was replaced as chairman by Owen Young in 1929,
with direct support by J.P. Morgan. The "Young Plan" of 1928 put more
teeth into the Dawes Plan, which many viewed as a strategy to subvert
virtually all German assets to back a huge mortgage held by the United
States bankers.
Neither
Dawes nor Young represented anything more than banking interests.
After all, WWI was fought by governments using borrowed money made
possible by the international banking community. The banks had a vested
interest in having those loans repaid!
In
1924, the president of Reichsbank (Germany's central bank at that
time) was Hjalmar Schacht. He had already had a prominent role in
creating the Dawes Plan, along with German industrialist Fritz Thyssen
and other prominent German bankers and industrialists.
The
Young Plan was so odious to the Germans that many credit it as a precondition
to Hitler's rise to power. Fritz Thyssen, a leading Nazi Industrialist,
stated
"I
turned to the National socialist party only after I became convinced
that the fight against the Young Plan was unavoidable if complete
collapse of Germany was to be prevented." [2]
Some
historians too quickly credit Owen Young as the idea-man for the Bank
for International Settlements. It was actually Hjalmar Schacht who
first proposed the idea[3],
which was then carried forward by the same group of international
bankers who brought us the Dawes and Young Plans.
It
is not necessary to jump to conclusions as to the intent of these
elite bankers, so we will instead defer to the insight of renowned
Georgetown historian, Carroll Quigley:
"The
Power of financial capitalism had another far reaching plan, nothing
less than to create a world system of financial control in private
hands able to dominate the political system of each country and
the economy of the world as a whole. This system was to be controlled
in a feudalistic fashion by the central banks of the world acting
in concert, by secret agreements arrived at in frequent meetings
and conferences. The apex of the system was to be the Bank for
International Settlements in Basle, Switzerland, a private bank
owned and controlled by the world's central banks, which were themselves
private corporations. Each central bank, in the hands of men
like Montagu Norman of the Bank of England, Benjamin Strong of the
New York Federal Reserve Bank, Charles Rist of the Bank of France,
and Hjalmar Schacht of the Reichsbank, sought to dominate its government
by its ability to control treasury loans, to manipulate foreign
exchanges, to influence the level of economic activity in the country,
and to influence co-operative politicians by subsequent rewards
in the business world."[4]
[Bold emphasis added]
So
here we have a brief sketch of what led up to the founding of the
BIS. Now we can examine the nuts and bolts of how the BIS was actually
put together.
The
Hague Agreement of 1930
The
formation of the BIS was agreed upon by its constituent central banks
in the so-called Hague Agreement on January 20, 1930, and was in operation
shortly thereafter. According to the Agreement,
The duly
authorised representatives of the Governments of Germany, of Belgium,
of France, of the United Kingdom of Great Britain and Northern
Ireland, of Italy and of Japan of the one part; And the duly authorised
representatives of the Government of the Swiss Confederation of
the other part Assembled at the Hague Conference in the month
of January, 1930, have agreed on the following:
Article
1. Switzerland undertakes to grant to the Bank for International Settlements,
without delay, the following Constituent Charter having force of law:
not to abrogate this Charter, not to amend or add to it, and not to
sanction amendments to the Statutes of the Bank referred to in Paragraph
4 of the Charter otherwise than in agreement with the other signatory
Governments.[5]
As
we will see, German reparation payments (or lack thereof) had little
to do with the founding of the BIS, although this is the weak explanation
given since its founding. Of course, Germany would make a single payment
to the BIS, which in turn would deposit the funds into the respective
central bank accounts of the nations to whom payments were due. (It
would be the subject of another paper to show the shallowness of this
operation: Money and gold were shuffled around, but the net amount
that Germany actually paid was very small.)
The
original founding documents of the BIS have little to say about Germany,
however, and we can look directly to the BIS itself to see its original
purpose:
“The
objects of the Bank are: to promote the co-operation of central
banks and to provide additional facilities for international operations;
and to act as trustees or agent in regard to international financial
settlements entrusted to it under agreements with the parties concerned.”
[6]
Virtually
every in-print reference to the BIS, including their own documents,
consistently refer to it as "the central banker's central bank."
So,
the BIS was established by an international charter and was headquartered
in Basle, Switzerland.
BIS
Ownership
According
to James C. Baker, pro-BIS author of The Bank for International
Settlements: Evolution and Evaluation, "The BIS was formed with
funding by the central banks of six nations, Belgium, France, Germany,
Italy, Japan, and the United Kingdom. In addition, three private international
banks from the United States also assisted in financing the establishment
of the BIS."[7]
Each
nation's central bank subscribed to 16,000 shares. The U.S. central
bank, the Federal Reserve, did not join the BIS, but the three U.S.
banks that participated got 16,000 shares each. Thus, U.S. representation
at the BIS was three times that of any other nation. Who were these
private banks? Not surprisingly, they were J.P. Morgan & Company,
First National Bank of New York and First National Bank of Chicago.
On
January 8, 2001, an Extraordinary General Meeting of the BIS approved
a proposal that restricted ownership of BIS shares to central banks.
Some 13.7% of all shares were in private hands at that time, and the
repurchase was accomplished with a cash outlay of $724,956,050. The
price of $10,000 per share was over twice the book value of $4,850.
It
is not certain what the repurchase accomplished. The BIS claimed that
it was to correct a conflict of interest between private shareholders
and BIS goals, but it offered no specifics. It was not a voting issue,
however, because private owners were not allowed to vote their shares.[8]
Sovereignty
and Secrecy
It
is not surprising that the BIS, its offices, employees, directors
and members share an incredible immunity from virtually all regulation,
scrutiny and accountability.
In
1931, central bankers and their constituents were fed up with government
meddling in world financial affairs. Politicians were viewed mostly
with contempt, unless it was one of their own who was the politician.
Thus, the BIS offered them a once-and-for-all opportunity to set up
the "apex" the way they really wanted it -- private. They demanded
these conditions and got what they demanded.
A
quick summary of their immunity, explained further below, includes
-
diplomatic
immunity for persons and what they carry with them (i.e., diplomatic
pouches)
-
no
taxation on any transactions, including salaries paid to employees
-
embassy-type
immunity for all buildings and/or offices operated by the BIS
-
no
oversight or knowledge of operations by any government authority
-
freedom from immigration restrictions
-
freedom to encrypt any and all communications of any sort
-
freedom from any legal jurisdiction[9]
Further,
members of the BIS board of directors (for instance, Alan Greenspan)
are individually granted special benefits:
-
“immunity
from arrest or imprisonment and immunity from seizure of their
personal baggage, save in flagrant cases of criminal offence;”
“inviolability of all papers and documents;”
-
“immunity
from jurisdiction, even after their mission has been accomplished,
for acts carried out in the discharge of their duties, including
words spoken and writings;”
-
“exemption
for themselves, their spouses and children from any immigration
restrictions, from any formalities concerning the registration
of aliens and from any obligations relating to national service
in Switzerland ;”
-
“the
right to use codes in official communications or to receive or
send documents or correspondence by means of couriers or diplomatic
bags.”[10]
Lastly,
all remaining officials and employees of the BIS have the following
immunities:
-
“immunity
from jurisdiction for acts accomplished in the discharge of their
duties, including words spoken and writings, even after such
persons have ceased to be Officials of the Bank;”[bold emphasis
added]
-
“exemption
from all Federal, cantonal and communal taxes on salaries, fees
and allowances paid to them by the Bank…”
-
exempt
from Swiss national obligations, freedom for spouses and family
members from immigration restrictions, transfer assets and properties
– including internationally – with the same degree of benefit
as Officials of other international organizations.[11]
Of
course, a corporate charter can say anything it wants to say and still
be subject to outside authorities. Nevertheless, these were the immunities
practiced and enjoyed from 1930 onward. On February 10, 1987, a more
formal acknowledgement called the "Headquarters Agreement" was executed
between the BIS and the Swiss Federal Council and basically clarified
and reiterated what we already knew:
Article
2
Inviolability
-
The
buildings or parts of buildings and surrounding land which, whoever
may be the owner thereof, are used for the purposes of the Bank
shall be inviolable. No agent of the Swiss public authorities
may enter therein without the express consent of the Bank.
Only the President, the General Manager of the Bank, or their
duly authorised representative shall be competent to waive such
inviolability.
-
The
archives of the Bank and, in general, all documents and any data
media belonging to the Bank or in its possession, shall be inviolable
at all times and in all places.
-
The
Bank shall exercise supervision of and police power over its premises.
Article
4
Immunity from jurisdiction and execution
-
The
Bank shall enjoy immunity from criminal and administrative jurisdiction,
save to the extent that such immunity is formally waived in individual
cases by the President, the General Manager of the Bank, or their
duly authorised representative.
-
The
assets of the Bank may be subject to measures of compulsory execution
for enforcing monetary claims. On the other hand, all deposits
entrusted to the Bank, all claims against the Bank and the shares
issued by the Bank shall, without the prior agreement of the Bank,
be immune from seizure or other measures of compulsory execution and
sequestration, particularly of attachment within the meaning of Swiss
law.
[12][bold
emphasis added]
As
you can see, the BIS, its directors and employees (past and present)
can do virtually anything and everything they want, with complete
secrecy, immunity and with no one looking over their shoulders. It
was truly a banker's dream come true, and it paved the international
freeway for the rampant financial globalism that we see manifest today.
Don't miss
the stunning conclusion! Click on part 2 below.
Click
Here For Part-----> 2
Footnotes:
1,
Quigley, Tragedy & Hope, (MacMillan, 1966), p.308
2,
Edgar B Nixon, ec., Franklin D. Roosevelt and Foreign Affairs, Volume
III (Cambridge: Balknap Press, 1969) p. 456
3,
Sutton, Wall Street and the Rise of Hitler, (GSC & Associates, 2002)
p. 26
4,
Quigley, op cit, p. 324
5,
BIS web site, Extracts from the Hague Convention, www.bis.org/about/conv-ex.htm
6,
BIS, Statutes of the Bank for International Settlements Article 3
[as if January 1930, text as amended on March 10,2003], Basic Texts
(Basle, August 2003), p. 7-8
7,
Baker, The Bank for International Settlements: Evolution and Evaluation,
(Quorum, 2002), p. 20
8,
ibid., p. 16
9,
BIS, Protocol Regarding the Immunities of the Bank for International
Settlements, Basic Texts, (Basle, August 2003), p. 33
10,
ibid, Article 12, p.43.
11,
ibid, p. 44
12,
BIS, Extracts from the Headquarters Agreement, www.bis.org/about/hq-ex.htm
Patrick M. Wood
is editor of The August Review,
which builds on his original research with the late Dr. Antony C. Sutton,
who was formerly a Senior Fellow at the Hoover Institution for War, Peace
and Revolution at Stanford University. Their 1977-1982 newsletter, Trilateral
Observer, was the original authoritative critique on the New International
Economic Order spearheaded by members of the Trilateral Commission.
Their highly regarded
two-volume book, Trilaterals Over Washington, became a standard reference
on global elitism. Wood's ongoing work is to build a knowledge center
that provides a comprehensive and scholarly source of information on globalism
in all its related forms: political, economic and religious.
NOTE: In accordance with Title 17 U.S.C. section 107, any copyrighted material herein is distributed without profit or payment to those who have expressed prior interest in receiving this information for non-profit research and educational purposes only. For further information please refer to: http://www.law.cornell.edu/uscode/17/107.shtml
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