It’s Standard’s Procedures

By Deanna Spingola

6 October 2008


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Standard Oil had one alleged major competitor for China’s business in 1907 – the Asiatic Petroleum Company, a British-based subsidiary of the Royal Dutch Shell-Rothschild combine. The two companies, with 85% of the kerosene trade throughout China, totaling about $94 million, attempted to divide the Far Eastern market, but competition remained fierce. One-sided trade treaties were designed to protect the oil companies. [1] Both companies relied on military assistance from their respective governments as needed to maintain their status. Thirteen percent of that profitable kerosene market was in Kwangtung Province (alternative English name: Canton Province), a relatively small area of China adjacent the South China Sea which resulted in more extensive trade with the outside world through its capital – Guangzhou. Consequently, it was the site of the Opium Wars, a hotbed of anti-imperialist activity and the major port of exit for exploitive cheap labor to the west. 


Big business consistently uses government influence. Philander Knox, Secretary of State (March 6, 1909 – March 5, 1913), attempted to use the same “Dollar Diplomacy” strategy in China as he had in Central and South America. See more about Knox here. He tried to coerce the Chinese to negotiate with the Harriman railroad backed by Kuhn & Loeb, Morgan and his First National Bank, and the Rockefeller-controlled National City Bank, instead of with the British, French, and Germans. Harriman wanted to establish a round-the-world transportation system using American steamship and railroad lines. Morgan also offered to supply arms to the Russians, if victorious in their skirmish with the Japanese in 1905, in exchange for Russian oil and commerce concessions. [2]


Before World War 1, petroleum was used to make kerosene, a highly desirable cheap substitute for whale oil and coal oil for lamps used world-wide before electric light bulbs. The internal combustion engines in the recently developed airplanes, trucks, ships, submarines and tanks used gasoline, actually a toxic waste, derived from petroleum. [3] One of the purposes of World War I (1914-1918) was the initial carving up of the world into three primary areas (trilateralism – to be formalized and completed by the creation of Rockefeller’s Trilateral Commission in 1973) after more bloody warfare. This was initiated by the Treaty of Versailles attended by the founders of the CFR. [4]  For information on the treaty and how Americans were deceived into the war see my article here


The U.S. needed to participate in the drawing up of the Treaty of Versailles which could only occur with participation in WWI. Therefore, the U.S. suffered 320,518 casualties[5] so that Rothschild/Rockefeller interests, maneuvered by their able minions, would be achieved during the negotiation process – specifically – reparations, border realignments and the future Zionist-created circumstances in the Middle East. The total number of World War I casualties, both military and civilian, was over 40 million — 20 million deaths and 21 million wounded. [6] Russia didn’t participate at Versailles or sign the treaty as she had pulled out of the war in 1917 for two reasons: Russia didn’t want its vast oil fields stolen; Russia was militarily ill-equipped to continue the senseless slaughter. Southern Russia had the world's largest supply of oil which didn’t fall under the control of Standard, British Petroleum or Royal Dutch, the three major oil companies (the first oil cartel) in the world as of 1910 who were intent on seizing and controlling all of the world’s oil. [7]


The Chinese, with an upsurge of nationalism and anti-foreignism, a cause of the earlier Boxer Rebellion, were demanding revisions of the treaty system. The big powers considered these requests at the Washington Conference in 1921-1922 and decided to permit China to gradually “regain control over the customs and to permit the interim collection of a 2½ percent surtax on imports and exports.” Unfortunately, the Washington Treaty was not ratified by all the signatories so it didn’t take effect. [8] Russia was not invited to this conference. By 1921, the U.S. had become the world’s super power, taking over from Great Britain. The procedures settled upon at this conference reveal the emergence of the “Versailles-Washington” system of international relations. [9]


In May 1923, the Kwangtung government regained control of the local Salt Inspectorate from the foreigners who were using the revenues from the Maritime Customs and the Salt Inspectorate to pay principle and interest on the foreign debts of the Peking government. Any surplus funds went to the Peking warlord administration. In 1924, the Kwangtung provincial government, controlled by the Kuomintang (The Nationalist Party), collected only $8 million compared to $21 million collected by the provincial government in 1921. In January 1924, the Kuomintang devised an anti-imperialist policy with an emphasis on workers and peasants. At the same time, technical and financial assistance arrived from the Soviet Union. This linked the Kuomintang to the Communist Party. [10]  


On March 12, 1925, Sun Yat-sen, head of the Nationalist Party and regarded by the Chinese everywhere as China’s modern founder died. When the Manchu Dynasty fell in 1911, he had become the provisional President of the new Chinese republic. He wanted to curb foreign power and unite China. At Sun Yat-sen’s death there were several contenders for China’s leadership. The most popular was Chiang Kai-shek. [11] Sun Yat-sen’s death created a crisis for the party and the Kwangtung government which decided to levy a kerosene tax to raise some much-needed money in order to gain control. [12]


Foreign oil dealers in the Kwangtung Province were notified of this kerosene tax by the Kwangtung government on March 24, 1925 which would take effect on April 1. A stamp tax of twenty cents would be levied on every five-gallon tin of kerosene. Foreign governments and the businessmen they protected refused to allow the local Chinese governments to tax their products because those treaties went un-ratified during the Washington Conference of 1921-1922. The American Minister in Peking, Jacob Gould Schurman (1921 to 1925), also former U.S. Minister to the Balkans, requested the Peking government to “issue strict instructions to the Kwangtung authorities to cease at once their plans for this tax.” [13]


Schurman was a proponent of big business and therefore the perfect candidate for China’s biased American minister. [14] Schurman, as President of Cornell in 1917, supported Wilson and World War I and exhorted the two thousand young men of Cornell’s Corps of Cadets to do the same. [15] He promoted internationalism as evidenced by the rhetoric promoted by the Schurman Society (Heidelberg, Germany) which in 1991, promoted Henry R. Luce’s (Skull & Bones) vision of The American Century. Luce was the founder and crusading editor/publisher of Time, Fortune, and Life magazines and a very outspoken internationalist. [16]


The arrogant oil companies would either stop selling in the region or replace the legitimate government, the Kuomintang, with a warlord government. An embargo, supported by their diplomats, would be an ominous warning to the Nationalists or warlords who might decide to levy such taxes in other regions of China. However, the U.S. and British oil company executives wanted armed enforcement. The British thought about seizing the Kwangtung arsenal or the Chinese section of the Kowloon-Canton Railway. Standard Oil vice president Howard E. Cole and their attorney, Roland S. Morris, urged the State Department’s Frank P. Lockhart to initiate military force to prevent the company’s loss of $800,000 a year just in Kwangtung. There were Americans who strongly supported the Nationalistic aspirations of the Chinese and encouraged the Secretary of State to stop meddling in China’s affairs. [17]


The U.S. government failed to immediately respond to Standard’s dictates so Standard Oil and Asiatic Oil continued their embargo which forced the Chinese to purchase oil from the Russians who were not regulated by any treaty. On May 13, 1925, a fire destroyed half of the cases of Russian gasoline in the Guangzhou harbor. This was an economic onslaught. [18] Standard Oil is known to have used violence against local competitor’s properties and products. Ruthless Rockefeller - John D. managed, by bribery, coercion, dynamite explosions and sabotage to crush or control any and all local oil refining competitors, all within a year.


On May 30, 1925, Chinese demonstrators were slaughtered by British-led police in the Shanghai International Settlement which led to nationalist outrage. On June 13, the Kuomintang army, with assistance from workers and peasants, defeated the Cantonese-based warlords and their armies, giving control to the Kwangtung government which meant they could levy taxes and diminish foreign influence and privileges. Exploited workers rebelled in Hong Kong (borders Guangdong Province), a hotbed of anti-foreign outrage. About 80,000 workers left Hong Kong for Kwangtung. There a worker’s Strike Committee provided work, housing and food for them. British and French troops killed fifty Chinese demonstrators in Kwangtung on June 23, 1925. [19] Hong Kong had been seized by Great Britain as a Crown Colony towards the end of the First Opium War (1839–1843).


Chiang Kai-shek had organized an anti-British boycott and had threatened to rid China of all foreign imperialists. Loyalties would change later. Civil war broke out between the Nationalist armies of the South and the northern warlords led by Chang Tso-lin. U.S. Marine Brigadier General Smedley Butler was sent to China to protect the lives and property of U.S. Nationals in Tientsin and offer temporary refuge for those Nationals in Tientsin.


General Butler arrived with the 3rd Marine Brigade, including his aide Arthur J. Burks, my grandfather, on March 16, 1927 and disembarked at the Standard Oil dock in the Whangpoo River opposite Shanghai. They set up tents in the Standard Oil compound and that is where they stayed. Their mission was unclear. Butler, to keep the Marines from being involved with the fighting between the two Chinese factions, attempted to maintain cordial relations with the Chinese people. His genuine respect and kindness towards the Chinese people won their appreciation and respect for him. He didn’t want another Haiti-style intervention that put him into the position of defending American business interests against the native rebels and he didn’t want to risk a single Marine’s life for Standard Oil. [20]


On December 24, 1927, the Standard Oil plant on the outskirts of Tientsin caught fire during a battle between the rival Chinese forces. There was sufficient fuel – gasoline and oil – to destroy the entire city of Tientsin. It took four days and about two thousand Marines to contain the fire. The citizens were grateful. A Standard official, during the blaze, vowed to donate $20,000 toward a recreation hall for the Marines once the fire had been brought under control. Standard lost one million dollars but they thanked Butler for having saved them four million dollars. The promise of $20,000 never materialized. [21]


Butler and his Marines undertook a project to rebuild the Peking/Tientsin Bridge which had been washed out by a flood. This would enable the villagers to get their produce to market. Chinese citizens honored Butler as a public benefactor and awarded him an Umbrella of Ten Thousand Blessings at a special celebration. Chiang Kai-Shek was chosen President of China on October 10, 1928 and political conditions temporarily improved. A civil war no longer threatened business interests in Tientsin and the 3rd Brigade withdrew in January 1929 and they left China. [22] [23]


Visualizing additional profits from a highly populated country, Rockefeller, promoted as a humanitarian, launched the International Educational Board with $21,000,000 to pursue educational activities in foreign universities. In 1927, he established the China Medical Board and built the Peking Union Medical College and then spent another $45,000,000 in an attempt to westernize Chinese medicine by abandoning effective inexpensive herbal remedies in favor of the carcinogenic and teratogenic miracle drugs made in the U.S. which, when lethal side affects are discovered, are constantly replaced by other costly drugs. [24] Both war and illness continue to produce profits.


Butler resented the use of the military to protect big business profits overseas and was very vocal about it. He publicly criticized the treatment veterans received and the “indifference of big business toward the men in uniform who had so often been called upon to spill blood for corporate profits.” [25] The presence of the Marines in China had nothing to do with the government’s professed concern about the safety of Americans living in China. It was to defend Standard Oil property and profits. Vietnam War critic, David M. Shoup, future Marine Corps Commandant, reached the same conclusion – the government endangered the lives of those Marines to protect Standard Oil. [26]


In 1930, General Butler was the senior-ranking major general in the Marine Corps and the “logical choice as the next commandant” but he was passed over. Navy Secretary Charles Francis Adams and President Hoover were incensed over his very public vocalizations about using military intervention for the benefit of big business. He was an articulate, extemporaneous speaker and gave over 1,200 speeches in over 700 cities during his speaking tour of the United States. Butler, aware of America’s growing distrust and disillusionment over the reasons why the armed forces were sent overseas, really infuriated the Hoover Administration when he decided to disclose those ongoing military procedures. This was at about the same time that Hoover and the media were trying to reassure the American people that the orchestrated economic crash was nothing to worry about. [27] We are in similar circumstances today!


Arthur J. Burks (1898–1974) retired from the Marine Corps as a Lieutenant Colonel and became a prolific pulp fiction writer[28] during the 1930s. He and General Butler had collaborated on a book together in 1927 – Walter Garvin in Mexico. [29] [30] General Butler approached Arthur for advice when he was considering retiring. Arthur summarized the pros and cons of such a decision. [31] General Butler retired on October 1, 1931 after more than thirty-three years of service. [32]


Butler said: “I suspected I was just part of a racket at the time. Now I am sure of it. Like all the members of the military profession, I never had a thought of my own until I left the service. My mental faculties remained in suspended animation while I obeyed the orders of higher-ups.” [33]


As bankers and industrialists entered into trade agreements to sell munitions for huge profits to Germany, Japan and Italy, Butler saw no difference between World War I and II. From the time he was a starry-eyed sixteen year old Marine recruit, American administrations had “persistently cried wolf in order to use him and the youths under him in order to protect and augment foreign investments wrapped in the flag.” [34] He was worn out from his speaking engagements and entered the Philadelphia Naval Hospital for a rest and examination. Just as America’s political leaders were gearing up for increased warfare*, General Butler died unexpectedly on June 21, 1940 at the Naval Hospital in Philadelphia at the age of 58.


* 60 million people died in WWII, including about 20 million soldiers and 40 million civilians.


[1] Principles and Profits: Standard Oil Responds to Chinese Nationalism, 1925-1927 by David A. Wilson, The Pacific Historical Review, Vol. 46, No. 4 (Nov., 1977), pp. 625-647

[2] Who Was Philander Knox? Is It Credible That He Would Commit Fraud?

[3] Black Gold Hot Gold, The Rise of Fascism in the American Energy Business by Marshall Douglas Smith, 2001

[7] Black Gold Hot Gold, The Rise of Fascism in the American Energy Business by Marshall Douglas Smith, 2001

[8] Principles and Profits: Standard Oil Responds to Chinese Nationalism, 1925-1927 by David A. Wilson, The Pacific Historical Review, Vol. 46, No. 4 (Nov., 1977), pp. 625-647

[9] The USA in the Making of the USSR: The Washington Conference, 1921-22 and 'Uninvited Russia' by Paul Dukes, The USA in the Making of the USSR shows the importance of the 'Russian question' at the Washington Conference and throws light on the emergence of the 'Versailles-Washington' system of international relations.

[10] Principles and Profits: Standard Oil Responds to Chinese Nationalism, 1925-1927 by David A. Wilson, The Pacific Historical Review, Vol. 46, No. 4 (Nov., 1977), pp. 625-647

[11] Recognized by Chinese everywhere as their country's modern founder, the physician-turned-nationalist failed in his dream of unification By Jonathan D. Spence, Time-Asia

[12] Principles and Profits: Standard Oil Responds to Chinese Nationalism, 1925-1927 by David A. Wilson, The Pacific Historical Review, Vol. 46, No. 4 (Nov., 1977), pp. 625-647

[13] Ibid

[14] Unrest World Wide, Says Dr. Schurman; President of Cornell Tells People's Forum One Cause Is Labor's Demand for Its Increment. The New York Times, December 18, 1911, Page 6

[15] Exhorts Cornell Men To Support Wilson; President Schurman, Speaking on the Crisis, Tells of War's Alternatives, February 3, 1917

[17] Principles and Profits: Standard Oil Responds to Chinese Nationalism, 1925-1927 by David A. Wilson, The Pacific Historical Review, Vol. 46, No. 4 (Nov., 1977), pp. 625-647

[18] Ibid

[19] Ibid

[20] The Plot to Seize the White House by Jules Archer, Hawthorne Books, Inc., New York 1973, pg. 93-108

[21] Ibid

[23] General Smedley Darlington Butler, Letters of a Leatherneck 1898-1931 edited by Anne Cipriano

Venzon, 1992, pg. 291

[24] The Truth About the Rockefeller Drug Empire:  The Drug Story By Hans Ruesch

[25] The Plot to Seize the White House by Jules Archer, Hawthorne Books, Inc., New York 1973, pg. 82

[26] Ibid

[27] Ibid, pgs. 106-108

[29] Quaker Devildog, Time, Monday, March 07, 1927

[30] New General Catalog of Old Books and Authors, Author names starting with  Bus – Buz

[31] Maverick Marine: General Smedley D. Butler and the Contradictions of American Military History (excerpt from chapter called "To Hell with the Admirals") By Hans Schmidt

[33] The Plot to Seize the White House by Jules Archer, Hawthorne Books, Inc., New York 1973, pgs. 106-108

[34] Ibid, pgs. 238-39



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