Sink the Lusitania!

To finance the early stages of WWI England and France had borrowed heavily from investors in America and had selected the House of Morgan as sales agent for their bonds. Morgan also acted as their U.S. purchasing agent for war materials, thus profiting from both ends of the cash flow: once when the money was borrowed and again when it was spent. Further profits were derived from production contracts placed with companies within the Morgan orbit.

The House of Morgan profited
from both ends of WWI

But the war began to go badly for the Allies when Germany's submarines took virtual control of the Atlantic shipping lanes. As England and France moved closer to defeat or a negotiated peace on Germany's terms, it became increasingly difficult to sell their bonds. No bonds meant no purchases, and the Morgan cash flow was threatened. Furthermore, if the previously sold bonds should go into default, as they certainly would in the wake of defeat, the Morgan consortium would suffer gigantic losses.

In WWI, German U-Boats upset the
traditional British domination of the seas

The only way to save the British Empire, to restore the value of the bonds, and to sustain the Morgan cash flow was for the United States government to provide the money. But, since neutral nations were prohibited from doing that by treaty, America would have to be brought into the war. A secret agreement to that effect was made between British officials and Colonel House, with the concurrence of the President. From that point forward, Wilson began to pressure Congress for a declaration of war. This was done at the very time he was campaigning for re-election on the slogan "He kept us out of war." Meanwhile, Morgan purchased control over major segments fo the news media and engineered a nation-wide editorial blitz against Germany, calling for war as an act of American partiotism.

Colonel Edward House secretly negotiated to
bring the U.S. into WWI on the side of Britain

Morgan had created an international shipping cartel, including Germany's merchant fleet, which maintained a near monopoly on the high seas. Only the British Cunard Lines remained aloof. The Lusitania was owned by Cunard and operated in competition with Morgan's cartel. The Lusitania was built to military specifications and was registered with the British Admiralty as an armed auxiliary cruiser. She carried passengers as a cover to conceal her real mission, which was to bring contraband war materials from the United States. This fact was known to Wilson and others in his administration, but they did nothing to stop it. When the German embassy tried to publish a warning to American passengers, the State Department intervened and prevented newspapers from printing it. When the Lusitania left New York harbor on her final voyage, she was virtually a floating ammunition depot.

The German warning to Americans not to board the
Lusitania was suppressed by the U.S. State Department

The British knew that to draw the United States into the war would mean the difference between defeat and victory, and anything that could accomplish that was proper -- even the coldly calculated sacrifice of one of her great ships with Englishmen aboard. But the trick was to have Americans on board also in order to create the proper emotional climate in the United States. As the Lusitania moved into hostile waters, where a German U-boat was known to be operating, First Lord of Admirality, Winston Churchill, ordered her destroyer protection to abandon her. This, plus the fact that she had been ordered to travel at reduced speed, made her an easy target. After the impact of one well placed torpedo, a mighty second explosion from within ripped her apart, and the ship that many believed could not be sunk, gurgled to the bottom of the sea in less than 18 minutes.

Winston Churchill ordered the Lusitania's destroyer
escort to abandon her, just as she entered hostile waters

The deed had been done, and it set in motion great waves of revulsion against Germany. These waves eventually flooded through Washington and swept the United States into war. Within days of the declaration, Congress voted $1 billion in credit for England and France. $200 million was sent to England immediately and was applied to the Morgan account. The vast quantity of moeny needed to finance the war was created by the Federal Reserve System, which means it was collected from Americans through that hidden tax called inflation. Within just five years, this tax had taken fully one-half of all they had saved. The infinitely higher cost in American blood was added to the bill.

Thus it was that the separate motives of such diverse personalities as Winston Churchill, J.P. Morgan, Colonel House and Woodrow Wilson all found common cause in bringing America into WWI. Churchill maneuvered for military advantage, Morgan sought the profits of war, House schemed for political power, and Wilson dreamed of a chance to dominate a post-war League of Nations.

For more information on this subject, please consult the excellent book The Creature from Jekyll Island, by G. Edward Griffin.