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Dwight Macdonald

Sparks in the News

(27 October 1939)

From Socialist Appeal, Vol. III No. 82, 27 October 1939, p. 4.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Footnote on International Law

In a recent issue of Time, John J. Clarke, of Beverley Hills, California, says more in two sentences than has been said to date in the entire Neutrality Law debate in Congress. Mr. Clarke’s sentences: “The President’s message on Neutrality evidenced a desire to return to International Law. The interesting thing about International Law is that the only way to enforce it is by war.”

The Swag

The old-fashioned nineteenth century type of imperialist conquest was, in essence, straight robbery. But it was veiled by the fact it was indirect – a matter of “spheres of influence,” of “opening up new markets” and “bringing civilization to backward peoples.” “Take up the white man’s burden!” exhorted Kipling in 1899, presenting imperialism as a Salvation Army movement to uplift the darker-skinned peoples of the world.

The Nazis have stripped away these pretensions from imperialism, as they have carried other tendencies of capitalism to their blunt, naked logical conclusion. Hitler’s imperialism is reduced to its simplest terms: as direct a matter of banditry as any bank robbery. When the Reichswehr moves into a new country, its first concern is The Swag. Banks, insurance companies, fraternal and trade union funds – all possible reservoirs of cash and credit, are picked clean, their assets being immediately transferred to Berlin. The Reichswehr functions as a strong-arm crew for the Reichsbank.

This is a factor which has a real effect on Hitler’s economic staying-power in the war. Every new conquest is, in the most concrete financial terms, a loss to the Allies and a gain to Hitler. The German Institute for Bank Research and Science recently issued a report on Polish industries. This showed that 43% of the total shares in Polish corporations are held by foreign capital – an index to the backward nature of Polish economy and one explanation for the so dramatically exposed hollowness and rottenness of the Polish ruling class. Of these shares, some $60,610,000 worth were owned by French interests, some $52,600,000 by American interests, and so on. All of this loot now goes into the Reich’s coffers – except, of course, for Comrade Stalin’s cut.

The Great International Bank Robbery

The sums just mentioned are invested in plant and equipment, and are not readily convertible into cash, the most pressing need of the Nazi state in this war. No doubt the Reichswehr has been also sending back to Berlin large amounts of cold cash from Poland just as it did from Czechoslovakia. But these conquests have also opened up to the Reich another reservoir of gold: the Bank for International Settlements, an institution in Basel, Switzerland, whose resources are owned jointly by the central banks of the world. Writing in the of October 22, R.H. Fetridge describes this international bank stick-up. Every time the Reichswehr takes over a country, the Reichsbank takes over its gold deposits in the B.I.S. The Czechoslovak job netted $25,000,000 in gold, Danzig and Poland have yielded an undisclosed additional sum. “Despite angry protests from Great Britain,” writes Mr. Fetridge, “no way has been found to prevent the transfers of these gold deposits.” The Bank of London was able to prevent Hitler getting hold of the Czech gold on deposit in London, but the B.I.S. is in neutral Switzerland.

The Hitler Mob Takes Over

Furthermore, the Nazis now have working control of the B.I.S. When the bank was founded, each of the chief nations participating had 19,000 shares – England, France, Germany, the United States, Italy, Japan, and Belgium. But naturally every fresh Nazi conquest has added shares to the original 19,000. Poland alone has yielded 4,000 BIS shares. Germany now holds the imposing total of 31,700 shares. The English and French members of the bank’s board refuse to attend meetings any more. They would like to liquidate the bank, but there is a provision in the by-laws that this can be done only by a three-fourths vote of the shareholders, a majority impossible to get without Germany and her friends.

The board meetings of the BIS these days must be comic affairs, with the Nazi bandits solemnly insisting on everything being done according to full legal forms. They have not only stuck up the bank, but have at the same time installed themselves as its chief stockholders. And to add spice to the joke, the new president of the bank is an American T.H. McKittrick, of the respectable old banking firm of Higginson & Co.

Thus ends another of the attempts made in the twenties to bring some law and order into world capitalism. The BIS was one of those experiments in international cooperation like the Kellogg Anti-War Declaration, the World Court, and the League of Nations. Its purpose was to provide an orderly way for adjusting international financial relationships in the chaotic post-war period. But its chief effect has been to aid the power which above all others refuses to abide by any of the rules of the game, and aggressively threatens the order and stability which the BIS was founded to establish. Just as the League of Nations was used as an instrument of power politics by the then strongest European imperialist group – England and France – so the BIS is now being manipulated by the Nazis. Such is the inevitable fate of all such schemes to establish “order,” “justice,” and “cooperation” in a system which more and more reverts to the brute law of the jungle for its real, as against its officially proclaimed, code of conduct.

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