All States — we saw in our previous article — as soon as the great industries and the huge trading concerns develop among their people, become unavoidable involved in wars. They are driven to them by their own manufacturers, and even by their own working classes, in order to conquer new markets — that is, new sources of easily obtained riches. Moreover, in every State there exists nowadays a class — a clique, I should say — infinitely more powerful than the manufacturing class, and which also incites to war. It is composed of great financiers and rich bankers, who intervene in international relations, and who foment wars.
It happens nowadays in a very simple way.
Towards the end of the Middle Ages most of the large Republican cities of Italy ended by running up huge debts. When the period of decay of these cities had begun, owing to their continued endeavours to conquer rich Oriental markets, and the conquest of such markets had caused endless wars between the Republican cities themselves, they began to contract immense debts to their own rich Merchant Guilds. A like phenomenon of bankers are willing to lend against a mortgage on their borrowers' future income.
Of course, it is principally the small States which are preyed upon. Bankers lend them money at 7, 8, and 10 per cent., and as a rule the loans are “realised” in such cases at no more than 80 per cent. Of the borrowed sum. So that, after deducting commissions to banks and middlemen, the State very often does not receive even as much as three-quarters of the amount inscribed in its ledger.
On these swollen or “watered” sums the State that has contracted debts must in future provide both for interest and sinking fund. And when it does not do so at the appointed term, the bankers are quite willing to add the arrears of interest and sinking fund to the principal of the debt. The worse the finances of the indebted State grow, the more reckless the expenditure of its rulers, the more willingly are new loans offered to it. Whereupon the bankers, after setting themselves up as a “Concert,” combine to lay hands on certain taxes, certain duties, certain railway lines.
In this way the financiers ruined Egypt, and later on caused it to be practically annexed by England. The more foolish the expenditure of the Khedive, the more he was encouraged. It was annexation by small doses.[1] In the same way Turkey was ruined, in order to take her provinces little by little. The same means, we are told, were employed towards Greece, when a group of financiers egged her on to war with Turkey, in order to seize part of her revenues. And in the same way Japan was exploited by the great financial houses of the United States before and during her wars with China and Russia.
As to China, for several years she has been partitioned by a syndicate representing the great banks of England, France, Germany, and the United States. And since the Revolution in China, Russia, and Japan demand to be allowed to take part in this syndicate. They want to profit by it in order to extend not only their spheres of exploitation, but also their territories. The partitioning of China, prepared by bankers, is thus on the order of the day.
In short, there is in the lending States a complete organisation, in which rulers, bankers, company promoters, concocters of business schemes, and other interlopers, whom Zola has so well described in “L'Argent,” joined hands in order to exploit whole States. Thus, where simple folk believe they have discovered deep political reasons, there are only plots hatched by the filibusters of finance, who exploit everything: political and economical rivalry, national enmities, diplomatic traditions, and religious conflicts.
In all the wars of the last quarter of a century we can trace the work of the great financial houses. The conquest of Egypt and the Transvaal, the annexation of Tripoli, the occupation of Morocco, the partition of Persia, the massacres in Manchuria, the massacres and international looting in China during the Boxer riots, the wars of Japan — everywhere we find great banks at work. Everywhere financiers have had the casting vote. And if up till now a great European war has not burst out, it is simply because the great financiers hesitate. They do not quite know to which side the millions involved will cause the scales to turn; they do not know which horse to back with their millions.
As to the hundreds of thousands of human lives which the war would cost — what have the financiers to do with them? The mind of a financier works with columns of figures which balance each other. The consequences do not come within his province; he does not even possess the necessary imagination to bring human lives into his calculations.
* * *
What an abominable world would be unveiled if only somebody took the trouble to study finance behind the scenes! We can guess it sufficiently, if only from the wee corner of the veil lifted by “Lysis” in his articles in La Revue, which appeared in 1908 in a volume entitled “Contre l'Oligarchie Financière en France” (” Against the Financial Oligarchy in France”).
From this work we can, in fact, see how four or five large French banks — the Crédit Lyonnais, the Société Générale, the Comptoir National d'Escompte, and the Crédit Industriel et Commercial — have come to possess the complete monopoly of great financial operations in the French money market.
The greater part, about four-fifths, of French savings, amounting every year to nearly £80,000,000, is poured into these great banks; and when foreign States, both great and small, railway companies, towns, or industrial companies from the five continents of the globe present themselves in Paris to make a loan, they turn to these four or five great banking companies, which have virtually the monopoly of foreign loans, and have at their disposal the necessary machinery to boom them.
Needless to say that it was not the skill of the directors of these companies that created their lucrative position. It was the State, the French Government, in the first place, that protected and favoured these banks, and raised them to a privileged position which soon became a colossal monopoly. Whereupon the other States — the borrowing States — strengthened this monopoly. Thus, the Crédit Lyonnais, that monopolises the Russian loans, owes its privilege position to the financial agents of the Russian Government, and to the Tsar's Ministers of Finance.
The amount of business transacted every year by these four or five financial societies represents hundreds of millions of pounds. Thus, in two years, 1906 and 1907, they distributed in loans £300,000,000, of which £220,000,000 were in foreign loans (“Lysis,” page 101). And when we learn that the “commission” of these companies for organising a foreign loan is usually 5 per cent. for “the syndicate of intermediaries” (apporteurs, through whose instrumentality the new loan is brought about), 5 per cent. for the “guarantee syndicate,” and from 7 to 10 per cent. for the syndicate or trust of the four or five banks we have just named, we see what immense sums go to these monopolists.
Thus, on single “intermediary” who “brought out” the loan of £50,000,000 contracted by the Russian Government in 1906 to crush the Revolution, actually received — so “Lysis” tells us in his just-mentioned book — a commissioned of 12,000,000 francs (£480,000).
We can, therefore, understand the occult influence on international politics exercised by the powerful directors of these financial societies, with their mysterious bookkeeping and with the plenary powers that certain directors exact and obtain from their shareholders — because they must be discreet when nearly half a million pounds have to be paid to Monsieur So-and-so, £10,000 to a certain Minister, and so may millions, besides the orders of the Légion d'Honneur, to the Press! There is not, says “Lysis,” one single large newspaper in France that is not paid by the banks. This is clear. One can easily guess how much money was distributed in this way among the Press during the years 1906 and 1907, when a series of Russian State loans, railway loans, and loans for real estate banks were being prepared. How many “quill-drivers” waxed fat on the loans — we see it in “Lysis's” book. What a windfall, in fact! The Government of a great State at bay! A revolution to be crushed! Such luck is not to be met with every day!
No doubt everybody is more or less aware of that, and there is not a single politician, in Paris or elsewhere, who does not know the workings of all this jobbery, and who does not hear mentioned the names of the women and men who have received large sums after each loan, great or small. Russian or Brazilian. And each one, if he has the slightest knowledge of business, knows to what degree this organisation of great financial houses is a product of the State, an essential attribute of the State.
And it would be such a State — the powers and prerogatives of which our politicians are so careful not to lessen — that most of the social reformers expect to be the instrument for the emancipation of the masses! What nonsense!
Be it stupidity, ignorance, or imposture — it is equally unpardonable in people who believe themselves called to direct the fate of nations.
Comments