Not since 1697 had the State itself issued paper money. In that year, 1697, notes in the denomination of £5 were issued direct to the public without the intervention of the finance houses; and these notes were not backed by gold but were legal tender for the payment of taxes. In 1914, however, the State issue of money was upon a colossal scale; the legal tender was not limited to the payment of taxes, but was complete for all purposes, and the issue was made with the goodwill of the bankers and indeed at their plea and intercession. Had that new money not been issued, the private banking houses of Britain would have been compelled to default to their creditors in a week’s time. Dr. Walter Leaf, late Chairman of the Westminster Bank and an ex-President of the Institute of Bankers, has enlightened us as to the real effect of the issue of Treasury notes under the Currency and Bank Notes Act of August 6, 1914.
“The amount and manner of the issue” he declares, “was left to the absolute discretion of the Treasury. This was essentially a War Loan, free of interest, for an unlimited period, and, as such, was a highly profitable expedient from the point of view of the Government.”
He proceeds to argue that, to some extent, this State issue of Treasury notes was covered by the gold coinage which patriotic people exchanged for the notes; but there was no provision whatever in the Currency and Bank Notes Act of 1914 for any gold backing, and, in any event, the amount of gold coin reserved for pretended security against Treasury notes totalling some three hundred million pounds was, at its maximum, only twenty-seven million pounds. The three hundred million of new money issued by the Treasury in 1914 was therefore, in effect, a War Loan, free of interest. But, alas, when the War was over, the Treasury, by a Minute issued on December 15, 1919, announced that its policy was to be a gradual reduction in these Treasury notes; and it proceeded year by year to take the notes off the Market, on the plea that the notes so cancelled were not covered either by gold or by Bank of England notes. Between the years 1920 and 1926, there was a progressive reduction in Treasury notes from £320,600,000 to £246,902,500.
To return, however, to the early war period, no sooner had Mr. Lloyd George got the bankers out of their difficulties in the autumn of 1914 by the issue of the Treasury money, than they were round again at the Treasury door explaining forcibly that the State must, upon no account, issue any more money on this interest free basis; if the war was to be run, it must be run with borrowed money, money upon which interest must be paid, and they were the gentlemen who would see to the proper financing of a good, juicy War Loan at 31/2 per cent, interest, and to that last proposition the Treasury yielded. The War was not to be fought with interest-free money, and/or/with conscription of wealth; though it was to be fought with conscription of life. Many small businesses were to be closed and their proprietors sent overseas as redundant, and without any compensation for their losses, while Finance, as we shall see, was to be heavily and progressively remunerated.
As each war loan became exhausted the lenders upon the first lower interest War Loans were permitted to transfer into the later higher interest Loans, and usurers’ interest upon credit was added to the national burden, so that to-day that burden is insupportable and the nation staggers along, cutting the bread and cheese of its poor, and starving the social services in a vain attempt to meet the charges incurred in the Great War Loan ramps.
But the controllers of the Money Power, the men who cold-bloodedly raised their demands upon their fellow-countrymen with every German advance in the field and with every German U-boat campaign at sea ; the men who organized the creation of hundreds of millions of unnecessary debt, the men who inflated rates of interest ; the men who, as the price of providing credits to free us from the threat of German slavery, enmeshed us in an interest burden of a million pounds per diem — it is they whose war-time plunderings I have sought to record in the foregoing pages. The machinations of the organized Money Power during the stress of war surely provide the most convincing of evidence that the nation must be the sole creator of money, and the guardian and banker of the savings and thrift of its citizens, if well-being and security are ever to be the common lot of men.
Usury on the Great War. The report of the Cunliffe Committee (1927) relates the story of the progressive piling up of our War Debt burdens. (Appendices to the Report of the Committee on National Debt and Taxation (1927), p. 18 et seq.) But it is in nowise a complete chronique scandaleuse of usury in war-time; nor did its authors so intend it to be. We find in its pages no reference to or hint of the magical process by which, while the nation struggled almost at death’s door for its very existence, and while masses of the fittest of our manhood were daily being blown into bundles of bloody rags, our banking fraternities continued to create for themselves a great volume of new credit and to lend that credit to us at interest, and indeed at progressively increased interest ; no reference to the fact that by this manufacture of bankers’ credit some portion, variously estimated in amount, of what now stands as the public debt, was simply fabricated for private ends and was not a bona-fide loan of real wealth to the nation. Professor Soddy (Fellow of the Royal Society, researcher into World War I) has estimated that the bankers actually created 2,000,000,000, no less, of this bank credit, and lent it out to us at 5 per cent. That means 100,000,000 a year upon nothing. (The Financiers and the Nation, Rt. Hon. Thomas Johnston, ex-Lord Privy Seal, 1934)
***
I regard Mr. Johnston’s book as of great public service. We cannot be too plainly reminded of the way in which the public is periodically fleeced by financial tricksters and swindlers; because these highlights of capitalist enterprise are, after each exposure, quickly forgotten. It is remarkable how regularly during the past hundred years the story is repeated. Each decade sees a new variant, but the process is essentially the same. Tens of thousands of small investors, and also some large ones, are persuaded by lies and misrepresentations to purchase shares in what is simply a swindle. Hundreds of thousands, if not millions, of pounds are pocketed by the swindlers and the crowd of accomplices and parasites who “in the ordinary course of business” co-operate in what must not yet be termed fraud. Presently there is a collapse, and, more or less, exposure: occasionally one or more of the chief swindlers gets prosecuted and sentenced to prolonged imprisonment at the public cost. But there is no effective or prolonged publicity. All the influences in the City combine to hush things up. Any angry talk is bad for business on the Stock Exchange. The banks fear the spread of panic and conceal their own losses. The news-papers are warned on behalf of influential people that any financial scandal interferes with legitimate business, and especially with the advertising of company promoters.
And so the interest of the public in the latest financial swindle dies down. (Sydney Webb, preface, The Financiers and the Nation, 1935)
Today, August 3, 2014, on the centenary of Britain’s entry into the Great War, the barrage of propaganda is particularly strong, with ample use of the kind of lies used to justify war and to incite ordinary people to hate Germany in 1914. “Britain went to war to protect the neutrality of Belgium” is the official line, according to the 1839 Treaty of London, which “derives its significance from Article 7 that bound Britain to guard the neutrality of Belgium in the event of the latter’s invasion” (First World War, primary documents). What may have been considered useful in 1839 was not necessarily “binding” or even significant in 1914 and was most likely merely a handy excuse to commit to war.
Much of the wartime publishing in Britain was in fact aimed at attracting American support. A 1929 article in the The Nation asserted: “In 1916 the Allies were putting forth every possible atrocity story to win neutral sympathy and American support” (Cynthia Wachtell, Representations of German Soldiers in American World War I Literature, 2007). Lurid U.S. propaganda posters accompanied demands for money: “Remember Belgium. Buy Bonds. Fourth Liberty Loan.” In the first months of the war, German soldiers murdered and raped the Belgian population’ (sonorous tones on the Euronews channel a
t 21.45 hrs., August 3, 2014). Apparently, it is all right to defame the history of a friendly nation, one hundred years after the alleged events. But normal criteria no longer serve to judge the social climate in Britain—a nation that still pathetically flaunts its “finest hour” with accounts of the Battle of El Alamein or the Battle of Britain, in its weekend newspapers. Decades of dumbing down after the U.S. model, including forced immigration, increasing joblessness, alcoholism, pornography, football hooliganism, contentless lying television, trashy lying newspapers, poisoned water and air, have done their job.
One of Germany’s main obstacles in the early 20th century was that it had come late to nationhood and was thus unable to claim its just status. Britain’s warmongering press and several leading British politicians had been agitating for war against Germany at least since 1895, on the basis that Germany’s commercial growth hindered Britain’s monopoly of world trade:
Our chief rival in trade and commerce today is not France but Germany. In case of a war with Germany, we should stand to win much and lose nothing; whereas, in case of a war with France, no matter what the outcome might be, we are sure to lose heavily. (OUR TRUE FOREIGN POLICY, Saturday Review, August 24, 1895, p. 17)
A conversation in 1907 between American diplomat Henry White and Arthur Balfour illustrates the pre-war British mentality.
Balfour: We are probably fools not to find a reason for declaring war on Germany before she builds too many ships and takes away our trade. White: If you wish to compete with German trade, work harder. Balfour: That would mean lowering our standard of living. Perhaps it would be simpler for us to have a war... Is it a question of right or wrong? Maybe it is just a question of keeping our supremacy. (Allan Nevins, Henry White, Thirty Years of American Diplomacy. New York: Harper Bros., 1930, pp. 257-58)
***
Extract of letter from Sir E. Goschen, Berlin. Typescript copy 15 Jan 1914. States that the Berlin papers in reporting Asquith’s journey to France allege that he is visiting France to obtain fuller details of the French naval programme than had been given to Churchill, and to soothe the French on account of Lloyd George’s newspaper statement that “France is our insurance against Germany; but we should much prefer to have an understanding with Germany ...” (Lloyd George papers, UK national archives)
***
Francis Bertie, British Embassy, Paris, to Grey. LG/C/4/14/20 ١٨ Jan 1915. Typescript copy. Contents: Reports his conversation with Baron Edmond de Rothschild in connection with the projected loan. (ibid)
***
R.Rodd, British Embassy, Rome, to Sir Edward. LG/C/4/14/21 ٢٢ Jan 1915. Typescript copy. Contents: States that Bulow has said that the Emperor of Germany was against the war, the German military entourage being responsible for it. (ibid)
***
Great Britain was going to make war on a kindred nation who desired nothing better than to be friends with her. (Theobald von Bethmann-Hollweg, German Chancellor, August 1914)
***
For 44 years, since the time we fought for and won the German empire and our position in the world, we have lived in peace and protected the peace of Europe. During this time of peace, we have become strong and powerful, arousing the envy of others. (Bethmann-Hollweg, Reichstag, August 3, 1914)
The Kaiser attempted to broker peace with the Tsar: “I have gone to the utmost limits of the possible in my efforts to save peace....Even now, you can still save the peace of Europe by stopping your military measures” (telegram, July 30, 1914).
The following day, Nicholas replied: “It is technically impossible to stop our military preparations which were obligatory owing to Austria’s mobilization. We are far from wishing for war. As long as the negotiations with Austria on Serbia’s account are taking place my troops shall not make any provocative action.”
However, Austrian troops were already about to attack Serbia and Russian neutrality would have been unacceptable to the people in the circumstances. Although there seems to have been a sense of the world-wide calamity war would entail, these and other attempts at international mediation must be considered half-hearted at best. A general outbreak of hostilities was neither necessary nor inevitable, as none of the major countries involved was threatened.
However, all the major countries had an interest in war against Germany. France wanted revenge for its defeat in 1870 and to retrieve Alsace-Lorraine; Britain wanted to regain the lead in international trade it had lost to Germany; Russia wanted to defeat Germany’s ally Austria-Hungary in order to strengthen pan-Slav adherence in the Balkans, and to supplant Ottoman domination of the Black Sea. And so the world slid inexorably into war.
All governments are without learning and perspective. It’s exasperating. Only a clear decision can break through the power of lies in all nations. So it is with us, the lies by means of which the endurance of weak civilians is not undermined. With the others, even more lies, however, in order to maintain their governments. As their position is worse, they must lie more there. (Chancellor Bethmann Hollweg, June 1916)
***
In November 1916 Lansdowne circulated a paper to the Cabinet, in which he argued that the war would destroy civilisation and that therefore peace should be negotiated on the basis of the status quo ante bellum. Lansdowne’s proposal received a hostile response from other Unionists in the Cabinet like Arthur Balfour and Robert Cecil. Lansdowne invited the editor of The Times, Geoffrey Dawson, to his house and showed him the letter he wanted to publish. Dawson was “appalled” and decided that publication would not be in the national interest. Lansdowne also showed the text to the Foreign Office who did not veto it. He then offered the letter to The Daily Telegraph, which accepted it. On 29 November 1917 Lansdowne’s letter was published in The Daily Telegraph. It again called for a negotiated peace with Germany: “We are not going to lose this war, but its prolongation will spell ruin for the civilised world, and an infinite addition to the load of human suffering which already weighs upon it...We do not desire the annihilation of Germany as a great power ... We do not seek to impose upon her people any form of government other than that of their own choice... We have no desire to deny Germany her place among the great commercial communities of the world.”The letter also called for a guarantee of the “freedom of the seas.” (Wikipedia)
***
LONDON, December 12. A wireless message received from Berlin states:
“The Reichstag met to-day. There was tremendous excitement. Dr. von Bethmann-Hollweg, the Imperial Chancellor, had previously conferred with the representatives of the neutral Powers and handed them a Note containing the proposals of Germany, which are understood to be the basis of a lasting peace. Dr. Hollweg formally proposed that peace negotiations he begun through the representatives of Switzerland, the United States, and Spain. Germany offers to give up all conquered territory and to return to the status before the war.”
LONDON, December 13. An official wireless message sent out from Berlin on Tuesday afternoon states:
“Dr. von Bethmann-Hollweg announced in the Reichstag to-day that Germany, with her Allies, conscious of their responsibility before God, before man, before the nation, and before humanity, proposed this morning to the hostile Powers to enter on negotiations for peace.”
Another message states that in the German Reichstag on Tuesday Dr. Bethmann-Hollweg announced that he had proposed to the Hostile Powers that day to enter on peace negotiations, and had drawn up proposals which he believed would be the basis of a lasting peace.
Neutral Ambassadors Consulted. The Chancellor on Tuesday morning received the American, Spanish, and Swiss representatives, and presented, to them a Note, proposing that negotiations should be opened up for peace. Hollweg asked them to transmit the Note to the hostile Governments. In Vienna, Constantinople, and Sofia the Governments of the Allies of Germany simultaneously issued an identical Note, the text of which was communicated to the Holy See and all the neutral nations. The contents of the Note are not disclosed. The wireless message adds
:
“The four Allied Powers have put forth propositions which, according to their firm belief, form an appropriate basis for the establishment of a lasting peace.”
Behind our fighters stands the nation at work. Germany is not a besieged fortress, as our adversaries imagine, but a gigantic, disciplined camp, with inexhaustible resources. We have made progress with a firm decision to continue the progress. We are always ready to defend ourselves and fight for our national freedom and safety in the future. We are always ready to stretch out the hand for peace. Our strength has not made our ears deaf to our responsibility, before God and humanity.
Our adversaries have evaded our former declarations concerning our readiness for peace since the outbreak of the war, when the Kaiser had to take the most grave decision which has ever fallen to the lot of a German. He was compelled to order our mobilisation following the Russian mobilisation. The single thought of the Kaiser is how peace can be restored to safeguard Germany after her victorious struggle, and with a deep moral and religious sense of duty towards the nation and towards humanity, the Kaiser now considers the moment has come for official action towards peace. (The Advertiser, Adelaide, December 14, 1916)
Tell the Truth & Shame the Devil Page 37