Global Predictor reshuffles its protégés: the way it was done in America

In order to understand a large-scale essence of the events occurring in Russia today, such as “circumcision” of Khodarkovsky & Co°, we bring to your attention an article “The way it was done in America”, published by Kommersant’-Vlast magazine on July 29/28 — August 3, 2003, which clearly shows as Global Predictor “deals” with the “in-crowd” members who dared to put their self-interest first instead of the global mafia’s.

After getting acquainted with this article everyone is offered to draw an independent conclusion on further destiny of Khodarkovsky & Co°. Among the resources of our site we’ve got a thorough coverage on the nature of such executive maneuver, such as “‘Circumcision’ of the elite as a way of Management Improvement” article (Mera za Meru № 24) as well as exposure of “the elites’ circumcising” mechanism in “‘Circumcising’ of Khodarkovsky” and “Warning to the Elite”.

The Kommersant’-Vlast magazine on July 29/28 — August 3, 2003
 

The Way it was done in America

Beginning of John Davison Rockefeller entrepreneurship falls in the US Civil War time. Like many businessmen of that time, John has risen on supplying the state military needs with over- priced petroleum. Right after the war was over, Rockefeller together with his partner, Henry Flagler, joint capitals in order to start petroleum production company, which in 1870 was named Standard Oil Company. The company was engaged not only in oil extraction, but also dealt with oil refining, clearly establishing a monopoly position in the market. Newspapers revealed that Rockefeller made a deal with a railway company owner to reduce transportation rates for Standard Oil petroleum, in exchange for which the company guaranteed to transport huge quantities of petroleum excluding the possibility of idle time of a rolling stock, thus, train cars with Rockefeller petroleum were served by the railway first. Besides, Standard Oil was actively involved in bankrupting its competitors through manipulation of petroleum prices. For instance, in 1872 Rockefeller sharply lowered prices on kerosene in Cleveland area bringing on a brink of bankruptcy 22 out of 26 local petroleum companies, which he subsequently acquired. Public looked at Rockefeller ‘s Company activity with sincere disgust, while newspapers published huge revealing articles about Standard Oil and its owner; nevertheless, for the time being authorities found Standard Oil to be of some use because the company brought some order in a disorganized American petroleum market. The atmosphere around Standard Oil began to heat up in the beginning of 1880’s when the state wanted to get involved in petroleum business independently. At once several states proposed plans of building oil-refining factories, which would be owned by the state. Prisoners were going to be used as a labor force; however, these plans could not be carried out with Standard Oil occupying the market.

First attempts of authorities to break down Rockefeller’s monopoly have failed: Standard Oil easily lived through the law on trade between the states passed in 1887, which was supposed to put an end to its railway privileges, it managed to bypass the well-known anti-trust law passed in 1890 transforming the Standard Oil Trust into the Standard Oil Company of New Jersey, which controlled the shares of all companies prior absorbed by Trust.

Seemingly Rockefeller has won. However, in 1904 under a personal sanction of president Theodore Roosevelt, whose election campaign has passed under the slogan of fight against trusts, a formal investigation of Standard Oil Company of New Jersey activity was begun. In 1906 investigation files were sent to court. The Company was losing cases in courts of different instances. President Theodore Roosevelt named Rockefeller the most dangerous criminal of USA. In 1911 the Supreme Court of USA has ruled to terminate Standard Oil activity. Authorities celebrated the victory. However, it would be absolutely wrong to assume that Rockefeller was destroyed as a businessman. He has kept all the companies’ shares, created as a result of redistribution of Standard Oil assets. His wealth even multiplied. Since America is not Russia, for all shares he was forced to sell, he was paid off according to adequate market prices.
 

The middle of XIX century was marked by a railway construction boom in America. The railway market was controlled by two persons — Cornelius Vanderbilt, who died in 1877 as the richest American of that time, and his main competitor, Jay Gould, director of Erie Railroad Co. In their struggle against each other and the other competitors Guild and Vanderbilt used all accessible means from stock market manipulations to armed strikes. They say, both kept gangster armies, which plundered the competitors’ trains and blew up bridges. Their influence was so great that even authorities did not attempt to interfere. That time thousands of kilometers of railways were laid annually in USA, but even the largest railway companies were compelled to approach bankers for loans.

Banker J.P. Morgan became the creditor of the largest American railway companies. At the slightest payment delay, Morgan, as historians cite, would informed the manager of the company: “Now your company belongs to my clients”. Often he was his own client. As a result, “the railway wars” in USA started to fade, and John P. Morgan began to control practically all railway companies in the northwest of USA.

In the beginning, authorities treated Morgan quite loyally as in case with Rockefeller, they even addressed him for help, for instance, when they needed for him to stop the 1902 miners strike in Pennsylvania. However, the same year of 1902 became a turning point. In the beginning of the year Morgan intended to establish Northern Securities Company, which would officially possess the railway companies in the northwest of USA. Unexpectedly for Morgan, the state has opposed. Theodore Roosevelt, referring to the anti-trust law passed in 1890, has given the order to the Minister of Justice to begin a liquidation process of a newly formed company. When anxious Morgan finally met up with Minister of Justice, Philander Nocks and reproached government that if it had notified him beforehand — then he somehow could have corrected a situation so that anti-trust legislation was not infringed, — Nocks answered with an unusual frankness: “We do not want to correct a situation, we want to for this to be over”.

It wasn’t a secret to anybody that Morgan was penalized for having a way too profound of an influence on all American life. The subject matter “United States against Northern Securities, Great Northern Railway, Northern Pacific Railway and John P. Morgan” was construed in a rather short time. Toward the middle of March the Supreme Court of USA recognized establishment of Northern Securities as illegal and dismissed it.

However, this wasn’t the end of Morgan’s prosecutions, authorities went ahead with the execution of an unprecedented investigation on the scale of influence by Morgan’s company. Federal representatives asserted that every string in managing the country’s leading financial establishments led to J.P. Morgan and Co, who accumulated the capital of 25 billion, that at that time equaled to two thirds of the US GNP. As well as Rockefeller, Morgan wasn’t stripped of his wealth, however, his influence was profoundly shaken. At the end of 1912, addressing to senatorial committee, 75-years Morgan confessed that he “didn’t want to administrate anything” and that he didn’t have any authority even within his own company. Soon after J.P.Morgan died.