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The Master Spider

A popular rumor has it that the Federal Reserve is owned by a
powerful clique of foreign financiers, but this is obviously not true. It
is owned by Federal Reserve Banks, which are owned by American
commercial banks, which are required by law to make their major
shareholders public; and none of these banks is predominantly foreign-
owned.12 But that does not mean that the banking spider is not in
control behind the scenes. According to Hans Schicht (the financial
insider quoted in the Introduction), the “master spider” has just moved
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to Wall Street. The greater part of U.S. banking and enterprise, says
Schicht, is now controlled by a very small inner circle of men, perhaps
headed by only one man. It is all done behind closed doors, through
the game he calls “spider webbing.” As noted earlier, the rules of the
game include exercising tight personal management and control, with
a minimum of insiders and front-men who themselves have only partial
knowledge of the game; exercising control through “leverage”
(mergers, takeovers, chain share holdings where one company holds
shares of other companies, conditions annexed to loans, and so forth);
and making any concentration of wealth invisible. The master spider
studiously avoids close scrutiny by maintaining anonymity, taking a
back seat, and appearing to be a philanthropist.13
Before World War II, the reins of international finance were held
by the powerful European banking dynasty the House of Rothschild;
but during the war, control crossed the Atlantic to their Wall Street
affiliates. Schicht maintains that the role of master spider fell to David
Rockefeller Sr., grandson on his father™s side of John D. Rockefeller Sr.
and on his mother™s side of Nelson Aldrich, the Senator for whom the
precursor to the Federal Reserve Act was named. David Rockefeller
was a director of the Council on Foreign Relations from 1949 to 1985
and its chairman from 1970 until 1985, and he founded the Trilateral
Commission in 1976. Schicht states that he also convoked the 1944
Bretton Woods Conference, at which the International Monetary Fund
and the World Bank were devised; and he was instrumental in
founding the elite international club called the “Bilderbergers.”14
The Council on Foreign Relations (CFR) is an international group
set up in 1919 to advise the members™ respective governments on in-
ternational affairs. It has been called the preeminent intermediary
between the world of high finance, big oil, corporate elitism, and the
U.S. government. The policies it promulgates in its quarterly journal
become U.S. government policy.15
The Trilateral Commission has been described as an elite group of
international bankers, media leaders, scholars and government offi-
cials bent on shaping and administering a “new world order,” with a
central world government held together by economic interdepen-
dence.16 Former presidential candidate Barry Goldwater said of it:
The Trilateralist Commission is international [and] is intended
to be the vehicle for multinational consolidation of commercial
and banking interests by seizing control of the political
government of the United States. The Trilateralist Commission

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Chapter 13 - Witches™ Coven

represents a skillful, coordinated effort to seize control and
consolidate the four centers of power ” political, monetary,
intellectual, and ecclesiastical.
The “Bilderbergers” were described by a June 3, 2004 BBC special
as “one of the most controversial and hotly-debated alliances of our
times,” composed of “an elite coterie of Western thinkers and power-
brokers” who have been “accused of fixing the fate of the world behind
closed doors.” The group has been suspected of steering international
policy. Some say it plots world domination.17 But nobody knows for
sure, because its members are sworn to secrecy and the press won™t
report on its meetings.

The Information Monopoly

Secrecy has been maintained because the Robber Barons have been
able to use their monopoly over money to buy up the major media,
educational institutions, and other outlets of public information. While
Rockefeller was buying up universities, medical schools, and the
Encyclopedia Britannica, Morgan bought up newspapers. In 1917,
Congressman Oscar Callaway stated on the Congressional Record:
In March, 1915, the J.P. Morgan interests, the steel, shipbuilding,
and powder interests, and their subsidiary organizations, got
together 12 men high up in the newspaper world, and employed
them to select the most influential newspapers in the United
States and sufficient number of them to control generally the
policy of the daily press of the United States. . . . They found it
was only necessary to purchase the control of 25 of the greatest
papers. The 25 papers were agreed upon; emissaries were sent
to purchase the policy, national and international, of these
papers; . . . an editor was furnished for each paper to properly
supervise and edit information regarding the questions of
preparedness, militarism, financial policies, and other things of
national and international nature considered vital to the interests
of the purchasers [and to suppress] everything in opposition to
the wishes of the interests served.18
By 1983, according to Dean Ben Bagdikian in the The Media Mo-
nopoly, fifty corporations owned half or more of the media business.
By 2000, that number was down to six corporations, with directorates
interlocked with each other and with major commercial banks. 19
Howard Zinn observes:
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[W]hether you have a Republican or a Democrat in power, the
Robber Barons are still there. . . . Under the Clinton administra-
tion, more mergers of huge corporations took place [than] had
ever taken place before under any administration. . . . [W]hether
you have Republicans or Democrats in power, big business is the
most powerful voice in the halls of Congress and in the ears of
the President of the United States.20
In The Underground History of American Education, published
in 2000, educator John Taylor Gatto traces how Rockefeller, Morgan
and other members of the financial elite influenced, guided, funded,
and at times forced compulsory schooling into the mainstream of
American society. They needed three things for their corporate inter-
ests to thrive: (1) compliant employees, (2) a guaranteed and depen-
dent population, and (3) a predictable business environment. It was
largely to promote these ends, says Gatto, that modern compulsory
schooling was established.21

Harnessing the Tax Base

The Robber Barons had succeeded in monopolizing the money
spigots, the oil spigots, and the public™s access to information; but
Morgan wanted more. He wanted to secure the banks™ loans to the
government with a reliable source of taxes, one that was imposed
directly on the incomes of the people.22 There was just one snag in
this plan: a federal income tax had consistently been declared
unconstitutional by the U.S. Supreme Court . . . .




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Chapter 14
HARNESSING THE LION:
THE FEDERAL INCOME TAX

With Dorothy hard at work, the Witch thought she would go into
the courtyard and harness the Cowardly Lion like a horse. It would
amuse her, she was sure, to make him draw her chariot whenever she
wished to go to drive.

“ The Wonderful Wizard of Oz,
“The Search for the Wicked Witch”




I f the Cowardly Lion represented the people unaware of their
power, the harness that would hitch the Lion to the chariot of
the bankers was the federal income tax. Slipping the harness over the
Lion™s mane was no mean feat. The American people had chafed at
the burden of taxes ever since King George III had imposed them on
the colonies. The colonists had been taxed for all sorts of consumer
goods, from tea to tobacco to legal documents. Taxation without rep-
resentation led to the revolt of the Boston Tea Party, in which colo-
nists dumped tea into the Boston Harbor rather than pay tax on it.
In designing the Constitution for their new utopia, the Founding
Fathers left the federal income tax out. They considered the taxation
of private income, the ultimate source of productivity, to be economic
folly. To avoid excess taxation, they decided at the Federalist Debates
that the States and the new federal government could not impose the
same kind of tax at the same time. For example, if the States imposed
a property tax, the federal government could not impose one. Con-
gress would be responsible for collecting national taxes from the States,
which would collect taxes from their citizens. Direct taxes were to be
apportioned according to the population of each State. Income taxes
were considered unapportioned direct taxes in violation of this provi-
sion of the Constitution.

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Chapter 14 - Harnessing the Lion

The absence of an income tax had allowed the economy to grow
and its citizens to prosper for over a century. From 1776 to 1913,
except for brief periods when the country was at war, the federal
government had been successfully funded mainly with customs and
excise taxes.i In 1812, to fund the War of 1812, the first sales tax was
imposed on gold, silverware, jewelry and watches. The first income
tax was also imposed that year; but in order to comply with constitu-
tional requirements, it was apportioned among the States, which col-
lected the tax from property owners. In 1817, when the war was
over, the new taxes were terminated.1
The first national income tax as we know it was imposed in 1862.
Again it was to support a war effort, the War between the States. The
tax was set at a mere one to three percent of income, and it applied
only to those having annual incomes over $800, a category that then
included less than one percent of the population. Congress avoided
Constitutional apportionment requirements by classifying the new tax
as an indirect tax. It was a misapplication of the law, but the tax was
not challenged until 1871. The delay allowed a precedent to be estab-
lished by which Congress could bypass constitutional restrictions by
incorrectly classifying taxes.
In 1872, this tax too was repealed. Another income tax was passed
in 1894; but no war was in progress to win sympathy for it, and it was
immediately struck down by the U.S. Supreme Court. In 1895, in
Pollock v. Farmer™s Loan & Trust Co., the Court held that general
income taxes violate the constitutional guideline that taxes levied di-
rectly on the people are to be levied in proportion to the population of
each State.
That ruling has never been overruled. Instead, the Wall Street
faction decided to make an end run around the Constitution. In 1913,
the Sixteenth Amendment was introduced to Congress as a package
deal along with the Federal Reserve Act. Both were supported by the
Wall Street Senator, Nelson Aldrich. The Amendment provided:
The Congress shall have power to lay and collect taxes on
incomes, from whatever source derived, without apportionment
among the several states, and without regard to any census or
enumeration.



i
Customs are duties on imported goods. Excise taxes are internal taxes
imposed on certain non-essential consumer goods.
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Wealthy businessmen who had opposed a federal income tax were
won over when they learned they could avoid paying the tax themselves
by setting up tax-free foundations. The tax affected only incomes over
$4,000 a year, a sum that was then well beyond the wages of most
Americans. The Amendment was simply worded, the tax return was
only one page long, and the entire Tax Code was only 14 pages long.
It seemed harmless enough at the time . . . .

From Little Amendments Mighty Hydras Grow

The Tax Code is now a 17,000-page sieve of obscure legalese,
providing enormous loopholes for those who can afford the lobbyists
to negotiate them. Corporations with enough clout, such as Enron,
have had whole pages devoted to their private interests. Enron paid
no taxes for four of the five years from 1996 through 2000, although it
was profitable during those years.2 The tax system has become so
complex that tens of millions of taxpayers have to seek professional
help to comply with its mandates. At least $250 billion are paid
annually for these services, in addition to the $8 billion required to
operate the Internal Revenue Service itself. The IRS has 144,000
employees “ more than all but the 36 largest U.S. corporations “ and it
employs more investigators than the FBI and the CIA combined.
According to calculations made in 1995, more than five billion hours
are spent annually in the effort to comply with federal income tax
requirements “ close to the total number of hours worked yearly by all
the people in all the jobs in the State of Indiana.3
The obscure court holdings testing the Tax Code™s constitutional-
ity can be as impenetrable as the Code itself. Take, for example, this
convoluted single sentence in a tax case titled Brushaber v. Union Pa-
cific Railroad, 240 U.S. 1 (1916):
[T]he contention that the Amendment treats a tax on income as
a direct tax although it is relieved from apportionment and is
necessarily therefore not subject to the rule of uniformity as such
rule only applies to taxes which are not direct, thus destroying
the two great classifications which have been recognized and
enforced from the beginning, is also wholly without foundation
since the command of the Amendment that all income taxes
shall not be subject to apportionment by a consideration of the
sources from which the taxed income may be derived, forbids


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the application to such taxes of the rule applied in the Pollock
Case by which alone such taxes were removed from the great
class of excises, duties and imposts subject to the rule of
uniformity and were placed under the other or direct class.4

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