The Real Story of AIG

April 5, 2009
By Vincent Gioia
AIG has been in the news a lot these days. At the beginning of the AIG saga the Fed said it was too big to allow it to fail and so billions were given to "save" the company. Of course this failed and still more money was thrown their way. When it was "discovered" that AIG had contractual obligations to give serious bonuses to key employees, congress was irate. Even after it became known that a Democrat, Senator Chris Dodd, inserted a provision in the Stimulus bill to protect these bonuses at the request of the Treasury Department, the jackals that passed, but didn't read, the bill were still furious.

With all the attention given to AIG I think it is interesting to learn a little more about the company.

First of all, some may be surprised to learn that AIG is a subsidiary of American International Corporation (AIC) and the parent has a most interesting history. AIC has succeeded in remaining invisible and does that by relying on secrecy because that's how its founders liked it. John D. Rockefeller, Sr., of Robber Baron fame, started the company in 1910. Other Barons of industry joined John D.; Andrew Mellon, J.P. Morgan, and Andrew Carnegie. Other American industrialists and bankers also joined the AIC venture. The reason such an illustrious group of giants came together was that knew the financial clout they could exert together would bring them even more wealth, but more importantly, power; at a time when there were few government restrictions interfering with business.

Rockefeller, the oil man, knew that Russia would become of major importance because of the discovery of oil in Baku near the Caspian Sea in Azerbaijan. The oil field was the largest known oil strike in the world at the time. However, the Baku oil field was controlled entirely by the Swiss munitions manufacturers Alfred and Robert Nobel and Tsar Nicholas II's banker, Baron Alphonse Rothschild, who had gotten there earlier. As early as 1884 Rothschild and Nobel were pumping as much oil from the Baku Oil Fields as Rockefeller was from all of his holdings in the United States and Rockefeller wanted to get in on the action. By 1870 Rockefeller's Standard Oil controlled 85% of the refining and distribution of oil in the entire world but by 1880 he lost most of his distribution rights in Europe to Rothschild.

In order to succeed in Russia Rockefeller realized the Tsar had to go.

Rockefeller, Morgan, Mellon and their banker friends were already well on their way to creating a central federal bank owned by them and getting the US to enact a national income tax to repay what the United States would soon owe to that privately-owned central bank. Taking over Russian oil was something else.

The Rockefeller group of business giants met in New York with Bolshevik Leon Trotsky between 1907 and 1910. Rockefeller, his banker friends, Mellon and Morgan, and steel man Andrew Carnegie, along with others of equal rank in the business world pooled their resources and put up $50 million to form the American International Corporation, AIC, which they announced was created to stimulate world trade. However the real purpose was to get the Bolsheviks to overthrow Tsar Nicholas II. They made a deal with Trotsky and his partner in crime Vladimir Ulyanov, whom the world would get to know as Lenin. In exchange for financing the Bolshevik Revolution Rockefeller and his robber Baron friends would be allowed to take over the Russian oil fields. But what actually happened is that Trotsky and Lenin double crossed AIC after they helped topple the Tsar.

It is an unfortunate reality that but for the interference of the Robber Barons the 1917 Bolshevik Revolution would not have succeeded. With the help of Rockefeller and his equally greedy merry men the Tsar was overthrown. To cement their power the Bolsheviks shot and killed the Tsar and his family enabling the well-financed Bolsheviks to depose the Romanov dynasty.

After this bit of history it may be asked who, or what, exactly, is American International Corporation? Jon Christian Ryter has written:

"AIC is one of the two largest corporations ever formed. The other is Standard Oil, which was broken apart by US District Court Judge Kenesaw Mountain Landis on August 3, 1907. At 4 p.m. on May 15, 1911, the US Supreme Court upheld the Landis judgment, and what was one behemoth oil giant became seven behemoth oil giants-with the Rockefeller family as the primary shareholders in all of them (otherwise known as 'the seven sisters'). The government would ultimately learn from its Standard Oil mistake because when the Reagan-era Supreme Court broke up Ma Bell, AT&T was forced to sell-off the breakaway companies."

AIC personnel comprised executives brought into the company who were trusted associates from each partner's own commercial ventures. Rockefeller, Mellon, Morgan and Carnegie masterminded the creation of AIC and built the corporation similar to Standard Oil with secrecy layers that made it very difficult to be scrutinized.

Among those brought into AIC was Frank Vanderlip from Rockefeller's National City Bank, one of the seven people who would not only help write the Federal Reserve Act legislation, but he would also be instrumental in getting congress to enact the 16th Amendment* by promising them fame and fortune, or threatening them with failure if they didn't go along. Vanderlip was on the board of AIC along with such luminaries who served at various points of time throughout AIC's century-old life, like Thomas Vail, CEO of AT&T, Percy Rockefeller (one of John D.'s brothers), James A. Stillman (a Rockefeller in-law), Pierre DuPont, and George H. Walker, maternal grandfather of George H.W. Bush.

At one point Robert S. Lovett joined the board and became a key advisor to President John F. Kennedy. Lovett advocated ignoring the 2nd Amendment and disarming the American people as the first step in creating global government.

"Other founding directors included manufacturer Cyrus McCormick; railroad executive James J. Hill; Edwin S. Webster (Stone's partner); investment banker Otto Kahn, meat-packer Ogden Armour; Assistant Secretary of the Treasury for Taft, Beekman Winthrop; Henry Smith Pritchett, president of the Carnegie Corporation; and Joseph P. Grace, then a Standard Oil chemist. He developed petrochemical products from crude oil. Also, banker Charles H. Sabin; W.E. Corey, head of US Steel; James Cash Penney, founder of J.C. Penney; and Charles A. Coffin, who replaced Thomas Edison as CEO of General Electric." (Jon Christian Ryter)

"In 1918, Forbes published his first list of the 30 richest America. Heading the list were the invisible rich whose wealth is never supposed to be mentioned by the media. Among them, alphabetically, were J. Ogden Armour, Vincent Astor, Andrew Carnegie, Pierre DuPont, Henry Clay Frick, Daniel Guggenheim, Cyrus McCormick, John Pierpont Morgan, John D. Rockefeller, Sr., Russell Sage, Jacob Schiff, Charles M. Schwab, and William Vanderbilt. Since all but a few of these names own shares of the Federal Reserve, it is unlikely that any of them became "less rich" over time. The business holdings of these men included oil, coal, railroads, steel, gold and silver mining, and investment banking. Rockefeller headed the Forbes list. His wealth in 1918 was conservatively estimated at $1.2 billion by Forbes in an age when a bank president who earned $5,000.00 per year and was considered to be an extremely wealthy man."

The Robber Barons wanted a world without borders with a common currency with which to trade anywhere in the world; a global economy with a global government. Does this sound familiar?

*The 16th Amendment is the Income Tax Amendment
Vincent Gioia is a retired patent attorney living in Palm Desert, California. His articles may be read at www.vincentgioia.com and he may be contacted at gioia@gte.net