A.N. FIELD
The Truth About the Slump

Six months after the Federal Reserve Board was established in the United States the German Government, according to a document published in the Sisson Report quoted in an earlier chapter, was telling its controllers of industry to open their war mobilisation orders.  As the assassination of the Austrian Archduke at Serajevo had not at this time taken place it shows clearly that the early outbreak of war had been determined on irrespective of, or in advance of, the Sarajevo tragedy that nominally precipitated it.  Whether the assasination of the heir to the throne of Austria was part of a pre-determined programme is a matter on which one can only speculate.  Post-war revelations have shown that it was more than the irresponsible act of an individual, and that the Serbian Government had been warned in advance that an attempt would be made.

On the financial side all we know is that the war followed close on the establishment of the Federal Reserve Board, by which event New York financiers with intimate German associations acquired a dominating position.

In an article by Captain V.H. Cazalet, M.P., published in the National Review for December, 1926, a description was given of a visit to the Ford works at Detroit at the end of October, 1926, and in the article appeared the following:

“Like other remarkable men Ford has one bugbear, i.e., international Jewish financiers.  We asked him who they were.  He said:  ‘I have several books which will tell you who they all are.  They were responsible for the last war, and will in the future always be capable of creating a war when they feel their pockets need one.’ ”

In the following year, Mr. Ford issued a retraction of the attacks on the Jews made in his newspaper, with the contents of which journal, he explained, the multitude of his activities prevented him from keeping close touch.  This remark could not apply to a personal statement made to Captain Cazalet.

As chief of the German General Staff during the war, General Ludendorff was in a position to acquire first-hand knowledge as to the origins of the war.  An interview with him appears in a book, Glimpses of the Great (Duckworth, 1930), written by an American, G.V. Viereck.  In it the General is quoted as saying:

“The same diabolically clever wire-pullers that brought about the last cataclysm anxiously wait for additional conflicts to further their ends.  They are busy once more enslaving nations and bringing them under the yoke of economic dependence.”

General Ludendorff told Mr. Viereck not to imagine that his countrymen in the United States were going to escape.  The news of late certainly shows that although the centre of money power is in the United States that power is far from operating to the advantage of the common people of that country.

Several references to the operations of the Federal Reserve Board and some of those associated with it, in so far as they affect Britain, occur in the memoirs of the late Sir Cecil Spring-Rice, British Ambassador at Washington from 1913 to the end of 1917, when the Lloyd George Government replaced him by the appointment of Lord Reading (formerly Sir Rufus Isaacs).  It will be remembered that at the outset of the war a number of large German liners were interned in New York, and that an attempt was made to have their sailings resumed under the American flag.  Of this episode Sir Cecil Spring-Rice wrote to Sir Edward Grey, Secretary of State for Foreign Affairs, as follows, under date of August 25, 1914:

“Another matter is the question of the transfer of the flag to the Hamburg-America ships.  It is not a very pleasant business.  The company is practically a German Government affair.  The ships are used for government purposes, the Emperor himself is a large shareholder, and so is the great banking house of Kuhn and Loeb, of New York.  A member of that house has been appointed to a very responsible post in New York, although only just naturalised.  He is connected in business with the Secretary of the Treasury, who is the President’s son-in-law.  It is he who is negotiating on behalf of the Hamburg-America Company.”

To this the editor of the memoirs appended the following note:

“Mr. Warburg was a member of the newly elected Federal Reserve Board.  He had been a partner of Mr. McAdoo, the Secretary of the Treasury.”

In a letter to Sir Valentine Chirol on November 13, 1914, Sir Cecil Spring-Rice wrote:

“Dernburg [of the German Embassy] and his crew are continually at work, and the German-Jewish bankers are toiling in a solid phalanx to compass our destruction.  One by one they are getting hold of the principal New York papers, and I was told today that the New York Times, which had a courageous Jew at its head who manfully stood up for the Allies, has been practically acquired by Kuhn, Loeb and Company and Schiff, the arch-Jew and a special protégé of the Emperor.  Warburg, nearly related to Kuhn, Loeb and Schiff, and a brother of the well-known Warburg, of Hamburg, the associate of Ballin [the late Herr Ballin was head of the Hamburg-America line], is a member of the Federal Reserve Board, or rather THE member.  He practically controls the financial policy of the Administration, and Paish and Blackett had to negotiate with him.  Of course it was exactly like negotiating with Germany.  Everything that was said was German property.  The result was that such arrangements were made as were thought to be for the advantage of the German banks, and the Christian banks were jealous and irritated.”

Sir George Paish and Sir Basil Blackett were two early financial representatives of Britain in the United States during the war.  Until America entered into the war Britain put her American transactions through the firm of J.P. Morgan and Company.  Mr. J. Pierpont Morgan, Senior, had died in March, 1913, and the business was carried on by Mr. J.P. Morgan, Junior.  The Sisson Report already quoted in the chapter on Russia, contains a reproduction of a German order of November, 1914, to secret agents in the United States ordering criminal activity in violation of the rules of neutrality.  At a later date the activities of the German military and naval attaches on the German Embassy staff, Colonel von Papen and Captain Boy-Ed, became so open and notorious that the American Government ordered their deportation in consequence of their complicity in various outrages.  While Sir Cecil Spring-Rice was staying with Mr. Morgan on July 5, 1915, an attempt was made to assassinate that gentleman.  A man entered his house and fired at him, wounding him in the stomach.  The assassin was arrested, and gave the name of Holt, but proved to be a German named Erich Muenter.  Sir Cecil Spring-Rice notes that Muenter “was known to many Germans here to have committed murder and was entirely at their mercy.  From private enquiries I know that he received money from outside sources and had confederates.”  Muenter was imprisoned, but was later found shot dead in prison and was officially reported to have committed suicide.  How a prisoner came to have a gun in his possession was not explained.  Sir Cecil Spring-Rice wrote:

“It is most likely that he was shot by order, as he had promised my informant a full confession the day after he died.  It was known in German circles that an attempt was to be made on Morgan.”

The circumstances surrounding this affair point to powerful influences being at work against the principal American financier assisting Britain in the war.

Returning to the financial side of affair, we find Sir Cecil Spring-Rice writing in another letter:

“Since Morgan’s death [Mr. Morgan senior is referred to] the Jewish hankers are supreme, and they have captured the Treasury Department by the simple expedient of financing the bills of the Secretary of the Treasury (in a perfectly fair and honourable manner), and forcing upon him the appointment of the German Warburg on the Federal Reserve Board, which he dominates.  The Government itself is rather uneasy, and the President quoted to me the text, ‘He that keepeth Israel shall neither slumber nor sleep.’  One by one the Jews are capturing the principal newspapers and are bringing them over as much as they dare to the German side.”

As time went on increasing difficulty was experienced by the British agents in getting money in the United States.  In July, 1917, one finds the British Ambassador recording that Mr. McAdoo, Secretary of the Treasury, had informed him that to get money from Congress Britain must give particulars of what she was spending it on.  Mr. McAdoo further suggested that it was desirable that someone in authority should be sent over to arrange for the loans required.

Lord Northcliffe, who was in the United States at this date as a British Government representative, also urged that someone who understood politics as well as finance should be sent over to handle the loan negotiations.  He summed up the position in a telegram as follows:

“They are complete masters of the situation as regards ourselves, Canada, France, Italy and Russia. ... If loan stops, war stops.”

As a result of these representations Lord Reading (formerly Sir Rufus Isaacs) was sent across to arrange matters.  Whether his appointment was suggested on the American side or the British is not disclosed in the matter to which the writer has had access.

The financial position as it stood at the time of America’s entry into the war in 1917 is thus summarised in The Life and Letters of Walter H. Page (Vol. II. pp, 272-3).  Mr. Page was at the time United States Ambassador in London:

“Thus by April 6, 1917, Great Britain had overdrawn her account with J.P. Morgan to the extent of 400,000,000 dollars, and had no cash available to meet this overdraft. ... The money was now coming due;  and if the obligations were not met, the credit of Great Britain in this country would reach the vanishing point.  Though at first there was a slight misunderstanding about this matter, the American Government finally paid this overdraft out of the proceeds of the first Liberty Loan.  This act saved the credit of the Allied countries;  it was, of course, only the beginning of the financial support that America brought to the Allied aid.”

Lord Reading entered into arrangements by which the British borrowings were specifically made repayable in gold, and by which they were to bear interest at not less than the highest rate on any United States war loan.  They were mostly repayable on demand, or at most three days’ notice, and were convertible at the option of the United States into long-dated stock.

On these terms, accepted on Britain’s behalf by Lord Reading, the British Government borrowed the 1,000 millions which it owed the United States at the conclusion of the war.  Once matters were put on this amazing footing those in charge of America’s finances could not lend Britain too much money.  The amount at her disposal was unlimited.

As we have seen, the total stock of monetary gold in the world is only 2,000 millions.  Britain under her bond to the United States might be called upon to produce half of this total stock in three days on penalty of being officially declared bankrupt.  The agreement meant that the British people were absolutely at the mercy of the United States.  Lord Reading, their official representative, had signed on their behalf a contract to perform impossibilities.

In face of this it is pathetic to find this passage in a letter written by Sir Cecil Spring-Rice on November 23, 1917:

“Several bankers told me that Reading’s mission was most useful, and that he was exceedingly adroit.  His reputation for cleverness was very high indeed, so high that there was a good deal of anxiety expressed lest he should succeed in putting one over Mr. McAdoo.”

In January, 1918, Lord Reading was appointed British Ambassador to the United States in place of Sir Cecil Spring-Rice, who died in Canada a few months later.  Later on Lord Reading was appointed Viceroy of India, that country so filled with unrest, and where Jewish activity has been pronounced.  In his book Mr. Hilaire Belloc says:

“Today it is Britain which stands to the Mohamedan as the thruster-in of the Jew.  It began with the support of Jewish finance in Egypt;  it went on with the extended control over Indian commerce by the Jews;  it continued in the control of Indian currency by the Jews.  It ended in the grotesque appointment to the Indian Viceroyalty and the extraordinary experiment of Palestine.”

More recently Lord Reading has become, as we shall see, a director of the American-financier-owned company which has got a strangle-hold on British industry by buying up the power plants of London and practically all the principal cities in the British Isles.

To return to our main theme, we next find that after Britain had incurred this enormous indebtedness to America, pressure soon came from the American end for a return by Britain to the gold standard.  Even before the war ended the Cunliffe Committee was set up by the British Government to report on the matter.  This committee was composed almost entirely of bankers, the producers and manufacturers with whose destiny they were playing being given no voice whatever in the matter.

The course of events following the piling up of war debts was incisively described by Mr. Arthur Kitson in the National Review for March, 1925:

“Having created these national gold debts, the conspirators were still fearful lest their hoards of gold might turn to dross if Europe should stick to its paper money and refuse to employ their metal for its internal currencies.  This fear was particularly intense as far as England was concerned.  The Treasury notes had performed all the functions of money perfectly—far better than gold.  There had been no legal tender inflation.  Whatever inflation there had been was due entirely to the vast issues of credit by the Treasury and the bankers themselves.  These notes formed the basis of what might have become a perfect elastic currency, admirably adapted to the commercial and industrial needs of the British public, who had grown accustomed to them and liked them.  Where gold had failed the Treasury notes succeeded.  Mr. McKenna, the chairman of the Midland Bank, has recently testified to the superiority of our ‘managed’ paper currency over the American gold-standard currency.  Moreover, these notes admitted of expansion without disturbing international affairs and without the aid of international financiers.  Hence their destruction became a necessity.  The appointment of a Committee consisting of the representatives of high finance was therefore urged upon our Government.  The Cunliffe Currency Committee with its carefully assorted members was the result.  These bankers recommended the return to the pre-War gold standard—‘according to plan.’  One cannot suppress a feeling of indignation and contempt for a body of men who, whilst millions of Britain’s sons from all parts of the Empire were freely giving away their lives to save us and civilisation from the domination of German Kultur, were engaged in a scheme for adding to their own and their shareholders’ enrichment at the expense of British taxpayers !

“The next step was the Brussels Conference, at which the representatives of the leading bankers of all the Allied and neutral countries were instructed to recom-mend a similar policy to that already demanded by the Cunliffe Committee.  Having thus secured consent of the Allied and neutral countries, there still remained Germany, Austria and Russia.  The Austrian currency was ‘stabilised’ by Wall Street and Lombard Street influence.  Then came the Dawes Scheme, which brought Germany into line.  The Russian position is still receiving attention, but it is certain that eventually Bolshevism will have to accommodate itself to the policy its leaders have so often denounced.

“Although the French, Belgian and Italian financiers have given their formal endorsement of the gold standard, their rulers have so far been much too wise and too patriotic to consent to the ruin of their trade and the stagnation of their industries merely for the enrichment of international bondholders and moneylenders.  Hence the pressure which the American Government is now [1925] putting upon these countries for the payment of their debts—particularly France.  The offer of gold loans is merely to inveigle them into the same financial web in which our bankers and Treasury officials have already involved us.

“The delay on the part of our officials to adopt the gold currency created a feeling of impatience in Pine and Wall Streets, and led to the recent artificial manipulation of both the pound and the dollar.

“What is termed ‘parity,’ viz., the pre-War ratio of the two money units, has been practically achieved outside of any trade operations.  Indeed, surprise has been expressed by one or two of our ardent gold standard advocates that the pound sterling should rise in relation to the dollar when the balance of trade is so heavily against us.  Since the whole movement is merely ‘a ramp’ to deceive the British public, no economic reasons need be sought.  [Kitson’s note: It should be remembered that the rates of exchange between foreign countries are manipulated and fixed by the bankers themselves.]

“The recent visit of the Governor and a Director of the Bank of England to New York was merely another move in the game, although our instructed journalists have tried to impress the public with the vast importance of this visit and the advantages it has accomplished.

“The gold currency system which the mere shadow of the Great War exposed and destroyed, is to be re-imposed without so serious a scheme being even submitted to the voters.  [It was restored in the month following the publication of Mr. Kitson’s article.]  With the re-establishment of this system, the German-American plot may be regarded as having succeeded.  Indeed, so far as England is concerned, the German-American financiers must have marvelled at the ease of their conquest.  No sheep ever went more readily to the slaughter than the British people have been led to their present hopeless conditions of debt-enslavement, which, as some of our politicians have reminded us, will lower the standard of living for generations to come.  The full effects of this financial policy are not yet realised.  Millions of our people have already tasted and are experiencing some of them, viz., unemployment, bad trade, and starvation.  But the evil days are yet to come.”

On the following page is a reproduction of a chart showing the general level of commodity prices in the United States from 1800 to 1927.

A significant feature of the rise in prices in connection with the war is that the greatest inflation occurred not during the war, as had been the case in previous wars, but after it.  At this date the American Federal Reserve Board was in possession of its huge gold accumulation and its policy was the determining factor in the price level.  According to evidence given by Professor J.K. Commons, of the University of Wisconsin, before the United States House of Representatives Banking and Currency Committee in 1927, this post-war inflation was deliberately created, Professor Commons said:

“What I wish to say to you was learned by me in confidence from a member of the Federal Reserve Board.  I, of course, will not give his name.  He and another member of the Federal Reserve Board in 1919 and 1920 understood what the Federal Reserve System was doing;  they were inflating prices and were going to bring about a terrific rise in prices.  They knew it. ... They protested in a meeting of the Federal Reserve Board against what was being done by the Federal Reserve Board at that time. ... They considered for a time whether it would not be better for them to offer their resignations and then give their reasons to the public for resigning.  They finally agreed to go along with the system, the majority, and simply to file their reasons in the record of the board so that in case the question was raised after their death their record would be clear.”

In the London Times of November 6, 1919, we find a message from its New York correspondent stating that Mr. Paul Warburg, “the directing force of the Federal Reserve Board throughout the greater part of the war,” had returned from a tour of England, Holland, France, Switzerland and Germany.  Mr. Warburg was quoted as saying:

“There are two fundamental evils which must be eradicated if world bankruptcy and communism are to be avoided.  These are the continuous increase in prices and decrease in production ... the persistent depreciation of capital.”

As we all know the post-war boom was followed by a speedy collapse.  In New Zealand this brought disaster to the soldier settlers placed on the land on the basis of boom prices.  Here again we have evidence that this collapse was made to order of the United States Federal Reserve Board.

In giving evidence before the House Banking and Currency Committee in 1926 at Washington, Mr. Western Starr, a retired farmer and head of the Farmer-Labour Party, said:

“In 1919 and 1920 things got—well, a little jumpy, and here are the minutes of a conference of the Federal Reserve Board, of the Federal Advisory Council and the directors of the Class A banks of this country held in Washington, D.C., on May 18, 1920, in which over the protests of some of their own members, secretly and under orders of secrecy, they decided to deflate.  There were reasons.  Some of the great employers of labour felt that they were paying too large a share of their income in the form of wages.  They had to reduce wages first thing.

“Now, in order to reduce wages they had to cut the cost of living.  They could not reduce wages until they cut the cost of living.  That meant they had to hit the farmer first.  That was the first step, and God knows they hit him.”

Mr. Starr then proceeded to quote at length from the minutes of this conference.  One of the directors of the advisory board of the Minneapolis Bank, he said, told the conference that:

“Our bank is making 10,000 dollars a day, net velvet, and we cannot offer these people this rule, we cannot knock them in this way and bring ruin, starvation and death to people who are dependent on us.”

Mr. Scott, of the Federal Reserve Bank of Dallas, Texas, according to another extract quoted, declared the proposal “monstrous,” and a strong protest was also made by Mr. Dowell of North Dakota.

Continuing, Mr. Starr said:

“These are Federal Reserve bank officials who make this statement, overridden by the statements, philosophy, and arguments of W.P.G. Harding [at that time chief executive officer of the Federal Reserve Board].

“Mr. Leatherwood :  Do you think that decision of that famous meeting held in Washington in which they decided to issue this order, had anything to do with the gathering in, soon thereafter, of the millions and hundreds of millions of securities of the little holders ?

“Mr. Starr :  My dear sir, it is only another illustration of the practice that has prevailed for more than 2,000 years.  It has been the practice of what you might describe as the moneyed class for more than 2,000 years to create alternate periods of high and low prices, buying when things are low and creating artificially stimulated high prices on which they sell out, only to create another period of deflation on which they buy in.  That has been the practice.  We have had sixteen different periods of that kind in our own history as a nation of less than 150 years.”

Further evidence of the action of the Federal Reserve Board in depressing prices in 1920 was provided by Mr. Swing, a Californian Congressman, in a speech made in the House of Representatives on May 23, 1922.  In that speech, quoted by Mr. Canfield, another witness on the Banking and Currency Committee hearings on the Strong Bill, Mr. Swing said:

“I was present at a meeting of the bankers of Southern California, held in my district in the middle of November, 1920, when W.A. Day, then Deputy Governor of the Federal Reserve Bank of San Francisco, spoke for the Federal Reserve Bank and delivered the message which he said he had been sent there to deliver.  He told the bankers there assembled that they were not to loan any farmers any money for the purpose of enabling the farmer to hold any of his crop beyond harvest time.  If they did, he said, the Federal Reserve Bank would refuse to discount a single piece of paper taken in such a transaction.  He declared that all the farmers should sell their crops at the harvest time unless they had money of their own to finance them, as the Federal Reserve Bank would do nothing toward helping the farmers to hold back any part of their crop no matter what the condition of the market.

“Mr. Cooper, of Wisconsin:  Did the gentleman from California hear that ?

“Mr. Swing:  I did.  I think I was the only person present who was not a banker.  This was in a way confidential advice being given by the Federal Reserve Bank for the benefit of the small bankers.

“I say that was the admitted declared policy of the Federal Reserve Board made by an officer of the Board delegated for the purpose of making an announcement for the information and guidance of the bankers of my district.  No one could be in any doubt for one minute as to what the natural, logical, and necessary consequences of such a policy would be.  If the entire crop of the country is thrown on the market at the time of the harvest, of course the market would be depressed.  The Federal Reserve Board deliberately set out to bear the market.  Now, if they could do that at that time, have they not done that with other commodities, and cannot the same system be used to stabilise money and to stabilise wholesale prices ?”

The foregoing statements show clearly that both the post-war boom and slump in the United States were in accordance with Federal Reserve policy, and in earlier chapters we have seen how it has befallen that American monetary policy dominates the world price level.  Moreover, the action taken in 1919 and 1920 is merely in accord with the steps taken in 1893 and 1907 to create an artificial monetary stringency.

At this date the Lloyd George Government was in office in Britain, a Government in which Jewish financial influence was very strong indeed.  In the early part of the year 1920 Mr. Austen Chamberlain announced in the House of Commons that the Government “had set its heart on deflating the currency,” and forthwith embarked upon the policy of currency deflation that ushered in long-continued trade depression and unemployment from which Britain has since suffered.

In the same year the shareholders of the Bank of England elected Mr. Montagu Norman as Governor of the bank.  Mr. Norman was a member of the American banking house of Brown, Shipley and Company.  In his book, This Age of Plenty (Isaac Pitman, 1929), Mr. C. Marshall Hattersley quotes a passage from the Wall Street Journal of March 11, 1927, stating that Mr. Norman is very intimate with Dr. Schacht, head of the Reichsbank, the central bank of Germany, and stating that he was unknown in financial London when first elected Governor of the bank in 1920.

Mr. Hattersley points out that among the twenty-four directors of this private bank, which today controls British currency, are a number with strong international connections.  Among them is Mr. Edward Charles Grenfell, a partner in Morgan, Grenfell and Company, the London house of J.P. Morgan and Company of New York, and formerly the dominant firm in the United States Money Trust.  This firm is in close alliance with Morgan, Harjes and Company of Paris, the French branch of J.P. Morgan and Company.  Another director is Mr. Kenneth Goschen, of the international firm of Goschen, Cunliffe and Company.  Still another is Mr. F.C. Tiarks, of the international firm of J. Henry Schroeder and Company which found the money for Germany under the Dawes scheme.

Mr. Hattersley also notes that the Bank of England notes which have replaced the war-time Treasury notes as the money of England are distinctly foreign in appearance and with no King’s head on them, the Royal effigy having thus been banished from the currency of the realm, except on the copper and silver small change.

Since his appointment Mr. Montagu Norman has spent a great part of his time running backwards and forwards between London and New York.  His activities since 1920, however well-intentioned, have been accompanied by no improvement in the state of British trade and industry.

A recent director, and now officer of the Bank, is Sir Otto Ernst Niemeyer, formerly Controller of Finance in the British Treasury.  Last year Sir Otto Ernst Niemeyer and Professor Theodor Emanuel Gugenheim Gregory visited Australia and New Zealand as emissaries of the Bank of England.  Australia may have been extravagant, but her present financial difficulties would not have been serious but for her debt incurred in fighting Germany.  In face of this fact it is surely a very extraordinary thing that the Bank of England should send out two agents, both from their names obviously of Teutonic descent.  The character of these gentlemen may be beyond reproach, but in view of the German-Jew domination in New York, in view of the way British finance is under the thumb of New York, what feeling can a layman experience but one of disgust at finding a foreign flavour in Bank of England action on this side of the world ?  As may be seen by reference to the appendix to this book, questions have been publicly raised—and apparently never answered—as to the Germanic connections of Sir Otto Niemeyer.

As Sir Otto Ernst Niemeyer appears to be generally considered by our bankers, politicians and newspaper editors—barring a few notable exceptions—to be a superhuman embodiment of the purest undiluted financial wisdom it is worth while seeing what he has done for Britain.

After the elections of 1922 Sir Otto Ernst Niemeyer accompanied Mr. Bonar Law to the German Reparations Conference at Paris when Mr. Bonar Law produced a plan to give Germany a four years’ moratorium, letting her off all reparations payments during that period.  The French refused to agree, and the proceedings ended in disorder.  Following on this conference the depreciation of the mark began—generally believed to have been an engineered swindle, and Germany defaulted on her payments.

Sir Otto Niemeyer accompanied the Chancellor of the Exchequer to the United States when the American debt was funded and Britain undertook to pay America annuity for 62 years, rising from £33,000,000 a year to a considerably higher figure (see Appendix, p. ix).

Sir Otto Niemeyer was one of the financial experts on the Exchange Committee set up at the Imperial Economic Conference in 1923 which declared that the Australian and New Zealand exchange, then standing at 30/- per cent., would automatically right itself to the pre-War figure of about 17/6 per cent. as soon as the gold standard was resumed.  We know how incorrect that has proved.

Sir Otto Niemeyer was a member of the Treasury Committee set up in 1924 and which reported in February, 1925, recommending the immediate return to the gold standard.  “Any temporary disadvantages,” declared this committee in its report, “will be many times outweighed.”  We also know how incorrect that has proved.

So far as the writer can discover pretty well every financial step of importance taken by Britain in recent years which has tended to make money dearer, to increase the deadweight of the National Debt, and generally to depress trade, increase unemployment, and break the backs of the British producers and manufacturers, has been distinguished by the support of Sir Otto Ernst Niemeyer.

What it cost to bring Sir Otto Ernst Niemeyer and Professor Theodor Emanuel Gugenheim Gregory to New Zealand has not been disclosed.  Perhaps the good people in Christchurch who pressed for the invitation will tell us what we have gained by the visit of these two distinguished Englishmen—if that description is considered correct.

On April 28, 1925, Mr. Winston Churchill, then Chancellor of the Exchequer, added to the debt Britain already owed him as a war strategist, by announcing that the gold standard had been resumed as from that day.

Mr. Churchill was soon after entertained as the guest of honour by the British Bankers’ Association.  It was fitting that the president of this association should bear the name of Sir Felix Schuster.  Who’s Who does not state where Sir Felix Schuster was born, but he was educated at Frankfort-on-the-Main, and his elder brother was born in that home town of British financial policy.  In complimenting Mr. Churchill in his action in restoring the gold standard Sir Felix Schuster said:  “There might be temporary drawbacks, but they would not count in the long run.  The benefit of stability and security would outweigh them all.  A great obstacle to world trade had been removed.”

From the moneylenders’ point of view there was no doubt about the benefits to be derived by having Britain’s trade once more tied inflexibly to the hoard of gold controlled by the international moneylending interest.  Mr. Hattersley in his book, This Age of Plenty, quotes an extract from the Bankers’ Magazine recording how a shipment of 11 millions of gold from London to New York was followed by a decline in Stock Exchange securities to the extent of 150 millions.  The owners of that gold doubtless knew quite well what would follow on their shipment of it and were simple people indeed if they did not profit by it.

When the Jew-ridden Lloyd George Government, under German-Jew pressure from New York, embarked on its policy of monetary deflation we find Mr. Reginald McKenna in his annual address as chairman of the Midland Bank telling the British public very clearly what it meant:

“Let us look at the policy of monetary deflation. ... Let us suppose that it were practicable by this process to bring prices permanently down to the pre-War level.  What sort of a charge would our National Debt mean to us ?  It stands today at £7,770,000,000, mostly borrowed when money was worth very much less than before the war.  With prices back to their former level the burden of the debt would be more than doubled, in other words, the creditor would receive a huge premium at the expense of the debtor.”

Such a result, Mr. McKenna declared, would be “repugnant to every principle of equity and economic propriety.”

That was the opinion of a British financier not born at Frankfort-on-the-Main as to what the policies of our Schusters, Schroeders, Niemeyers, Goschens, Gugenheim-Gregorys, and the rest were going to mean.  That Mr. McKenna was not mistaken one has only to refer to the file of the London Statist for July last.  In an article published during that month the Statist pointed out what the price decline had meant up to then in the dead-weight of the debt Britain owed America.  That debt was funded in 1923 at £945,205,000.  Since then £35,755,000 had been paid off, leaving £909,452,000 outstanding.  The Statist price index number in 1923 was 133, in July last it was 98.  Thus the outstanding American debt, adjusted to the value of money in 1923, would be £1,234,256,000, or £289,051,000 more than the original amount.  The burden today is considerably heavier than it was in July last, and the controllers of gold can juggle the burden of the world’s debts about to any extent they please—excepting that if they go too glaringly far the public at large may at last realise where the root of their trouble lies.