Golden Lily: How the CIA Funded a Covert Empire

One of the darkest episodes of the second world war was the brutal slaughter of 30 million people in East Asia by the Japanese. The death rate of Allied POWs in this region was a staggering 30% (more than 7x higher than the death rate in Nazi camps). Yet, there is little discussion today of these war crimes. In fact, every member of the imperial family was exonerated. Why were Japanese royalty let go, while Germans were prosecuted? The grotesque answer lies with riches that were looted from the Chinese, Koreans, and Burmese during the conflict.

When Allied forces blockaded the Japanese, much of their stolen treasure was buried in the Philippines. Upon their surrender, General Yamashita was taken into custody along with his surrogates. His driver, Major Kojima Kashii, was tortured to reveal the booty’s location.

Since Yamashita had arrived from Manchuria in October 1944 to take over the defense of the Philippines, Kojima had driven him everywhere. In charge of Kojima’s torture was a Filipino-American intelligence officer Severino Garcia Diaz Santa Romana, a man of many names and personalities, whose friends called him ‘Santy’. He wanted Major Kojima to reveal each place to which he had taken Yamashita, where bullion and other treasure were hidden.

Supervising Santy, we learned, was Captain Edward G. Lansdale, later one of America’s best-known Cold Warriors. In September 1945, Lansdale was 37 years old and utterly insignificant, only an advertising agency copywriter who had spent the war in San Francisco writing propaganda for the OSS. In September 1945, chance entered Lansdale’s life in a big way when President Truman ordered the OSS to close down. To preserve America’s intelligence assets, and his own personal network, OSS chief General William Donovan moved personnel to other government or military posts. Captain Lansdale was one of fifty office staff given a chance to transfer to U.S. Army G-2 in the Philippines. There, Lansdale heard about Santy torturing General Yamashita’s driver and joined the torture sessions as an observer and participant.

Early that October, Major Kojima broke down and led Lansdale and Santy to more than a dozen Golden Lily treasure vaults in the mountains north of Manila, including two that were easily opened.

$100 billion in wealth (in 1945 prices) was estimated to be buried in the Philippine hills, including tens of thousands of tonnes of gold. Adjusted for inflation, its worth is valued at about $3 trillion. After being briefed of the situation, the Truman administration decided to keep the treasure a state secret. The loot would be funneled into a covert political action fund to fight communism. It was called the Black Eagle Trust.

According to [CIA Deputy Director] Ray Cline and others, between 1945 and 1947 the gold bullion recovered by Santy and Lansdale was discreetly moved by ship to 176 accounts at banks in 42 countries. Secrecy was vital. If the recovery of a huge mass of stolen gold became known, thousands of people would come forward to claim it, many of them fraudulently, and governments would be bogged down resolving ownership. Truman also was told that the very existence of so much black gold, if it became public knowledge, would cause the fixed price of $35 and cause the fixed price of $35 an ounce to collapse...

Documents do show that between 1945 and 1947 very large quantities of gold and platinum were deposited in the world’s biggest banks, including Union Banque Suisse and other Swiss banks, which became major repositories of the Black Eagle Trust.


Hirohito & Asia’s Stolen Treasures

Related Posts

Part 2: From Golden Lily to the War on Terror

Part 3: The Collateral Damage of Golden Lily

Part 4: Golden Lily's Liar Loans and the Subprime Meltdown

Comparing the White Vote and the General Vote

(Note: I strongly encourage you to click the image links on this post when reading; they're essential to understanding what I'm saying.)

On November 4, 2008 Senator Barack Obama was elected president, winning a substantial margin over Republican candidate John McCain. In the popular vote, Mr. Obama won 52.9% of the electorate to Mr. McCain’s 45.7%; he thus took a 7.2% margin.

Mr. Obama, however, did not do so well with white, non-Hispanic voters. According to exit polls, the newly elected president lost whites by double-digits; taking 43% of the white vote to Mr. McCain’s 55% support.

This is not anything new; for decades now, the Democratic Party has been losing the white vote. Indeed, the last time a Democratic presidential candidate actually won whites was in 1964, when Texan Lyndon Johnson delivered a landslide pummeling to Senator Barry Goldwater.

Ever since then Democrats have been in a bad way with whites:

Link to Graph Comparing the White and Popular Votes

This graph compares the Democratic share of the white vote (as found by exit polls) to their share of the total vote. The top line indicates the former; the bottom indicates the latter. The three Democrats who did relatively well with whites were Democratic candidates Hubert Humphrey, Jimmy Carter, and Bill Clinton.

As the graph shows, the white vote generally follows the popular vote (not a surprise, given that it composes the majority of the popular vote). Nevertheless the gap between the two has been steadily widening; in the past three elections, Democrats lost whites by double-digits yet still remained competitive in the general election.

This trend can be more accurately pictured by graphing the relative “swing” of the white vote compared to the overall election:

Link to Graph of the White "Swing"

This measurement indicates how the white electorate would have voted if an election had been tied; it is more useful than looking at the absolute vote. A candidate who lost the white vote by 40%, for instance, would generally be said to have done poorly with whites. If, however, we found out that the candidate had done even worse with the general electorate – say, losing by 45% – one could very well say that he or she did relatively well with whites.

In the last presidential election, for instance, Mr. Obama lost whites by twelve points, according to exit polls. However, Mr. Obama also won the overall electorate by seven points. Whites were therefore nineteen points more Republican than the average voter – as the graph indicates. In a hypothetically tied election, they would have voted Republican by nineteen percentage points (or a Democratic margin of negative nineteen points, according to the graph.)

This graph paints a slightly different picture of Democratic performances amongst whites. The adjustment makes Mr. Clinton and Mr. Obama look less impressive (Mr. Obama, especially), while making Mr. Humphrey look really good. To be fair, the 2008 election probably constitutes more of an outlier than the start of a trend for Democrats, given Mr. Obama’s unique strength amongst minorities. Expect the white “swing” to return to a more Kerryesque point in 2016.

Finally, one must note the degree to which the white vote is influenced by patterns in the South. Mr. Obama took less than 30% of the white vote in seven states: Alabama, Georgia, Louisiana, Mississippi, Oklahoma, South Carolina, and Texas. This low degree of white support is not unusual for Democrats. One-sided, racialized voting patterns in this region undoubtedly skew the overall white vote to be more Republican than would otherwise be the case.

P.S. For those interested, here is a table of the white vote over time, according to exit polls.



Time For Another Third-Party Run?

(Note: I strongly encourage you to click the image links on this post when reading; they're essential to understanding what I'm saying.)

Presidential election results are often pictured through electoral college maps, a useful and simple tool. Looking at the competition of the two parties throughout time provides a quite interesting exercise. Certain states turn blue, then red, then blue again. Others stay the same color. One election the map is filled with red; the next election blue makes a comeback. And on and on it goes.

This is in fact quite deceiving. What the electoral college does not show is the history of third-party challenges to the two-party system. In 1992, for instance, presidential candidate Ross Perot finished with 18.9% of the vote – yet not a single state in the 1992 electoral college showed his third-party run.

Since 1992, however, third-parties have had quite a rough run. This graph shows the third-party vote after that year:

Graph of Minor Party Vote: 1992 to 2008

Several factors influenced this. Mr. Perot ran again in 1996, winning a much reduced share of the vote. In 2000 Green candidate Ralph Nader polled as high as six percent, before his support collapsed as voters abandoned Mr. Nader for Vice President Al Gore. Then came the infamous Florida debacle, in which Nader votes literally cost the Democratic Party the presidency. Ever since then not a single third-party candidate has gained more than one percent of the vote.

Will either 2012 or 2016 be the year for a third-party run? On a micro-level, discontent with both parties does not appear to be extremely high. Democrats are fairly happy with President Barack Obama. The tea-party movement is really just a large group of amped-up Republican supporters – so the Republican Party isn’t exactly falling apart, either. Of course, these types of evaluations are naturally subjective. Different people may come to different conclusions.

Let’s take a look, then, at the macro-level trend. Here is a graph of third-party performance throughout the entire history of the United States, since popular voting first started.

History of Vote for Minor Party

The data here is also fairly inconclusive. Strong minor party candidacies seem to come and go in no particular order. There are long periods where they get less than 1% of the vote, and times where they regularly break the 10% barrier. To be frank, I was expecting to find a more discernible pattern – say, a strong minor party performance every four or five cycles.

Here is the data in a table format, for those interested:

Vote for Minor Party in Table Format

To conclude, one can make a strong case either way. Since 1964, strong third-party performances seem to come every three elections or so. Under this argument, America might be overdue for a third-party candidacy in 2012 or 2016. On the other hand, one might also argue that the country is headed towards another long period of utter two-party dominance, such as existed from 1928 to 1964 (during the time of the so-called New Deal coalition).

What is fairly certain is that third-party candidates will continue having extreme difficulty actually winning the presidency. Out of 56 presidential elections, minor parties have a batting average of exactly zero. The strength and organizational depth of the two major parties, combined with the extreme hurdles presented by the first-past-the-post system, continue to make a third-party presidency almost impossible.

This might be a good thing. To date, the strongest minor party performance in the electoral college occurred in 1860, when they won a combined 111 out of 303 electoral votes. That year Republican candidate Abraham Lincoln won the presidency, despite not being on the ballot in ten states. Shortly afterwards the country plunged into Civil War.




Arizona’s Law and the Bennett Law

The recent signing of Arizona’s harsh anti-immigrant bill reminded me of another law passed a while ago. Commonly called the Bennett law, it aimed to make the teaching of English mandatory in all public and private schools. Like Arizona’s law, it constituted a response to large immigration, ignited by nativist sentiment.

The Bennett law reacted to similar anti-immigration feelings as those present in Arizona today. To many Americans, immigrants were unwanted foreigners taking away American jobs. They spoke a foreign language and came from a foreign land. They did not speak English and were accused of refusing to do so. They had a different culture and stayed together amongst themselves; assimilation did not seem to work with them. They seemed less loyal to the United States and more loyal to their homeland. At core, they seemed “un-American.”

I am speaking, of course, about German immigrants in Wisconsin.

The year was 1890, and America was faced with a massive, unprecedented inflow of immigrants. They were coming from all over western Europe – Germany, Ireland, Norway and Sweden. Many were Catholics – a religion some did not consider Christian in those times. Others considered drinking alcohol as quite normal, in contrast to American norms.

Bennett’s law came about because of these cultural clashes. Originally an ordinary school reform, it became engulfed in controversy when Assemblyman Michael Bennett of Dodgeville added an amendment requiring all schools to teach English.

During this time, many German-Americans went to private, parochial schools set up by the immigrant community; these were especially prevalent in rural Wisconsin. Because many did not teach English, the Bennett law posed an existential threat to these German schools. The Democratic Party, which had a substantial base amongst immigrants, came out strongly against the law; the Republican Party, dominant in Wisconsin at the time, strongly favored it.

Republican supporters, including Governor William Hoard, argued that learning English was vital to succeeding in America. Mr. Hoard stated:

I have, I believe, as friendly a feeling towards our German-American population as any man in this country; and if I did not believe that the Bennett Law would assist in the advancement of their youth I would certainly oppose its continuance upon our statute books. I want the little German boy and girl, the little Norwegian, the little Bohemian and the little Pole, the children of all foreign born parents, to have the same chance in life as my children. Without a knowledge of the English language they can not have this chance.

They also appealed to good-old American patriotism and the much-admired American tradition of the “little red schoolhouse.” One newspaper wrote:

The little district school-house is very dear to the American heart, and whoever lays the hand of violence upon it will evoke a storm of wrath which no power on earth can withstand. It is impossible to tell what motive may lurk behind this opposition to the Bennett law, but if its opponents are preparing for an attack upon our public schools, let them beware.

Opponents, on the other hand, called it an unconstitutional intrusion of the government into private affairs. They argued, moreover, that the Bennett law was pointless; German-Americans were quickly learning English anyways.

The main contention, however, was that the Bennett law constituted an attack on the German-American immigrant community. One German newspaper heatedly claimed that:

To such people who will recognize as “Americans” only those whose ancestors lived here during the war of the revolution, the German who clings to his home customs and to his glorious native tongue is an annoyance. It is not sufficient for them that we should become Americanized – we want to do that in the proper manner, of course – but they want us to become de-Germanized. And they think that can be accomplished first by destroying German schools. Their calculation is certainly a correct one. Aside from immigration, which it is sought to restrict in every possible manner, the German element in America has its greatest strength in the German schools. In destroying these, as the Bennett law seeks to do, the German element would lose one of the main conditions of its existence.

Matters came to a head in the 1890 gubernatorial election, when Republican Governor William Hoard, a powerful advocate of the Bennett law, faced re-election. Mr. Hoard lost by an overwhelming margin to Democratic candidate George W. Peck, backed by the angered German-American community.

In the following years the Republican Party’s dominance upon Wisconsin politics was severely disrupted. Their 7-2 House congressional majority was upended, turning into a 8-1 Democratic majority. Democrats gained a two-to-one majority in the state legislature, and Wisconsin voted Democratic in the 1892 presidential election (for the first time since 1852). Although other factors, such as an unpopular tariff, were also responsible for this, the Bennett Law certainly played no small role. It was promptly repealed in 1891.

Fortunately for the Republican Party, German-American loyalty to the Democratic Party did not last. Their self-consciousness as an immigrant community gradually faded away as they were absorbed into the American melting pot. Today individuals with German heritage tend to vote Republican. Some undoubtedly are influenced by nativist sentiment against those supposedly foreign, non-English speaking, assimilation-resistant Latino immigrants flooding into the United States.

But if the history the Bennett Law tells one anything, the Latino immigrant of today is the German immigrant of yesterday. In half a  century labeling Latinos as “foreigners” may sound as strange as talking about a German-American immigrant community.



Five Things the United States Did Right

One of the greatest strengths the United States has constitutes its ability to admit mistakes – to apologize and acknowledge that America has not always been right, and that it has sometimes done things terribly wrong. This capacity has always served the country well; if America has often traveled down the wrong road, it has even more often corrected its path.

Yet although people do the country a great service in perceiving in faults, sometimes the criticism goes a bit too far.

Take my college, for instance, a great institution which I love – but which exemplifies this excessive self-criticism. I have taken classes in which professors have labeled America a nation founded upon “white supremacy.” Another course, supposedly chronicling America’s history, turned out to be a litany of how the United States had oppressed blacks, women, Native Americans, Hispanics, Asians, the poor, homosexuals, Third World countries, the environment, and everything in between.

I have conversed with friends convinced that the United States has hurt the world far more than it has helped it. I know students so blinded by bitterness and hatred for America’s wrongdoings that it is frightening and very sad – who find racism and oppression in every TV show or every action of the Republican Party. Sometimes I feel the blindness creeping on myself.

So in the spirit of fighting this blindness, here are five things America has done right:

5. Acknowledging its wrongs. Although this post is a reaction to this gone too far, America’s ability to self-criticize still constitutes a substantial strength. Few other countries are as ready to accept error as the United States. While Germany unconditionally views its actions during WWII as a national failure, Japan still honors its war criminals. Britain may admit colonialism was wrong, but many in the country still hold pride in the days when self-determination was denied to half the world.

4. Technological innovation. The United States has developed a number of inventions and innovations which have greatly improved living standards. Whether it was through inventing the light bulb or developing the Internet (for which America was largely responsible), America’s creations are responsible for bettering the lives of billions.

3. Democracy. Although its backing for democracy has not been perfect, in the aggregate democracy is better off with America in the world.  The American Revolution and its revolutionary ideals played a vital factor in spreading democracy and catalyzing the momentous French Revolution. America expanded the right to vote faster than almost every other country (Germany, for instance, only first gained democracy in the 1920s). As a well-working liberal democracy, the United States functions as an inspiration for many other countries. Even if the American government may not support their specific cause (e.g. during the Cold War), many activists for democracy still see America as an example to light their path.

2. Being on the right side of history. In the great conflicts of the 20th century, the United States has generally fought for the right side. America may have made mistakes fighting Nazism or communism, but the overall cause was the more just alternative. It always despised the monarchy which took Europe so long to overthrow. And while America may have dabbled in colonialism, its hostility to European imperialism sealed the fate of their dying empires.

1. Treatment of minorities. This may sound strange, given that so many of America’s wrongs have involved its minorities. Yet while discrimination and subtle racism still burden the lives of millions of minority citizens, at the same time those minorities have far more opportunity than they would have in any other country. America is more generous to immigrants than almost every country in the world – one of its greatest advantages. France and Germany still do not consider their immigrants citizens even after three generations. In China Sun Yat-sen still called the Manchus foreigners three hundred years after they first entered China. In the United States, by contrast, it only takes one generation to become American. For larger groups the process is longer – Jews, Irish, Italians, and Slavs were considered foreign for many years. Today the same applies to Hispanics. Yet eventually Hispanics will be considered as white as the Irish are today.

One group, of course, will never be classified as white – African Americans (and probably Asian-Americans), who have the greatest claim to grievance against America. Yet while the United States enslaved and segregated its black citizens, it also elected a black president in 2008. Blacks have power of sorts today, and the United States has made sure that their story is a central part of its history. Ask Americans to name the greatest American of the past century, and many will probably say MLK. Ask Americans to name the best president, and they will say the one who freed the slaves. This may sound like small consolation to the millions of blacks struggling under the yoke of poverty today. Perhaps a better one is this: in no other country I can name has a dominant majority elected a member of its impoverished minority as president.





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