THE MONEY POWER

Te Awamutu Courier, Volume 55, Issue 3929, 21 July 1937, Page 9

THE MONEY POWER

THE FRENCH FINANCIAL CRISIS. The vast unseen forces which operate behind the scenes producing slumps and crisis, industrial unrest, riot and bloodshed are not easily comprehended by the man in the street He is apt to look upon the turmoil round him as something far too complicated for him to understand. Indeed, every effort is made to keep him in ignorance and convince him that he is quite incompetent to grapple with fundamental problems—these must be left to “experts”! It is only by constant study (indulged in by few) that facts coms to light which connect up and explain many incidents of international importance which one would otherwise regard as entirely disconnected events attributable to I 'many and various causes. I give below a quotation from an article which appeared in the United States Bankers’ Mag azine, dated August 26th, 1924; “Capital must protect itself in every possible maner by combination and legislation. Debts must be collected, bonds and mortgages foreclosed as rapidly as possible. When through a process of law the common people lose their homes, they will become more docile and more easily governed through the influence of thi strong arm of Government applied by a central power of wealth under control of leading financiers. This truth is well known among our principal men now engaged in forming an imperialism of capital to govern the world. By dividing the voters through the political party system we can get them to expend their energies in fighting over .questions l otf no importance. Thus by 'discreet action we can secure for ourselves what has been so well planned and successfully accomplished.”

Pretty far-fetched, you say? But wait a little. A circular sent out by the American Banking Association, March 11th, 1893, shows some of the early methods by which these things were accomplished:— “The interest of national banks requires financial legislation by Congress. Silver, silver certificates and treasury notes must be retired, and national bank notes upon a gold basis made the only money. This will require the authorisation of five hundred millions to one thousand millions of new bonds as the basis of circulation. You will at once retire one-third of your circulation and call in one-half of your loans. Be careful to make a monetary stringency among your patrons, especially among successful business men. Advocate an extra session of Congress to repeal the purchasing clause of the Sherman Law and for its unconditional repeal per accompanying form. Use personal influence with your Congressmen, and particularly, let your wishes be known to your Senators. The future life of national banks as fixed and safe investments depends upon immediate action as there is an increasing sen timent in favour of Government legal tender notes and silver coinage.” Coming down to more modern times the inquisitive reader will find similar tactics described in John Gunther s book “Inside Europe.”—“The regents of the Banque de Fance decisively controlled France politics, because by withholding credits from the treasury they could break any prime ministers ■they didn’t like For instance the Banque persuades old Gastcn Doumergue, who headed France s ‘National Government’ formed after the Stavisky riots, to demand full powers. The chamber promptly threw the fatuous old gentleman out. The next prime minister was PierreEtienne Flandin, and the Banque squashed him in six months. “Flandin, six feet four inches, a ma i of the Centre, an honest fellow, refused to bow unconditionally to the Banque’s will. He said: ‘We are given a choice: deflation or devaluation of the franc. I refuse to let myself be tied up in this dilemma.’ He proposed a third -alternative, a policy of easier money, gradual ‘re-flation.’ The Banque didn’t like this and cooked up the panic which overthrew Flandin The prime minister retaliated by dismissing Clement Movet, the governor. The bank thereupon refused to re-discount Government short-term loans. Pressure on the Government from the Banque became enormous. On June 15th, the Government had to meet a big payment of Government bonds but it was penniless. Flandin was living hand to mouth by borrowings from the post office savings. Frenchmen, worried, fearing inflation, began to buy gold and ship their capital abroad. Blandly, the Banque let this go on. It could have stepped the drain cf gold but it wanted to beat Flandin. In a panic, Flandin appealed to the Chamber foi the same ‘full powers’ which he had previously refused to request. The Chamber was naturally incredulous and overthrew Him. The Banque, victorious, then easily plugged the leak of gold. This was the inner history of t?ie French financial ‘crisis’ ->t June, 1935.” More recently still the cables or June 29th, 1937, gave us the news under startling headlines: “Frances Plight,” “Geld Leaves the Country, the news that M. Bonnet had revealed the disappearance abroad ot some £60,000,000 in gold between June Ist and June 23rd. Only £lB2 009 was left in hand that morning and the Government was obliged to boi-

low for its immediate needs from the Autonomous State Funds. Having regard to the quotations I have given above, the intelligent reader will immediately ask himself: What is the Banque de France after?” For obviously somewhere in the background is that powerful institution which has engineered this panic for its own ends. The question is easily answered. Legislation is to be passed to mend the situation. Included in the Bill is a clause drap ped' up carefully in well meaning and high sounding platitudes where only the discerning would notice it. “The Government is authorised until August 31st to take .... all mea • sures to assure the suppression of attacks on the State credit, fight against speculation, assure economic recovery, control prices, balance the budget and defend the geld reserves without the control of exchanges.” The balancing of the budget will insure cutting down of the Government’s expenditure, a necessary complement to a deflationary policy. The Bank would not like the exchange , to be controlled. This would be a severe handicap to the owners of gold and would make the engineering of more “panics” difficult. Moreover, it would put an immediate and effective stop to speculation. No longer will it be necessary for the maintenance of the £100,000,000 equalisation fund and so another thorn in the Bank’s side >s to be removed. By the comparatively simple expedient cf sending abroad nearly all France’s gold and cutting off Government credits the Chamber of Deputies has once more been bludgeoned into submissiveness to the will of the Banque de France. France, it is alleged has a Democratic Government, but it is not difficult to discover why it is that the international financiers prefer democracies —where the partysystem is in vogue—as a venue for their operations.