Drew - got the download. Looking forward to reading it. Elvis, thanks for the welcome. I support your "niche." I moved by banking to a small, locally owned bank.
bks, I would love to borrow your pdf of the book. I can't afford to buy it, right now. Let me go through my Tragedy and Hope notes to try to put together a response on . Again, Historian Caroll Quigley's download (
http://www.carrollquigley.net/pdf/Tragedy_and_Hope.pdf) When you download the book from that site, pages 60-62, regretably, are missing. I think this is the text of those two pages - haven't found a hard-copy of the book, for confirmation. One reference to Monopoly capitalism is in these pages. Text follows:
pp. 60-62
"The Governor of the Bank of England must be the autocrat who dictates the terms upon
which alone the Government can obtain borrowed money."
Montagu Norman and J. P. Morgan Dominate the Financial World
In addition to their power over government based on government financing and
personal influence, bankers could steer governments in ways they wished them to go by
other pressures. Since most government officials felt ignorant of finance, they sought
advice from bankers whom they considered to be experts in the field. The history of the
last century shows, as we shall see later, that the advice given to governments by bankers,
like the advice they gave to industrialists, was consistently good for bankers, but was
often disastrous for governments, businessmen, and the people generally. Such advice
could be enforced if necessary by manipulation of exchanges, gold flows, discount rates,
and even levels of business activity. Thus Morgan dominated Cleveland's second
administration by gold withdrawals, and in 1936-1938 French foreign exchange
manipulators paralyzed the Popular Front governments. As we shall see, the powers of
these international bankers reached their peak in the last decade of their supremacy,
1919-1931, when Montagu Norman and J. P. Morgan dominated not only the financial
world but international relations and other matters as well. On November I l, 1927, the
Wall Street Journal called Mr. Norman "the currency dictator of Europe." This was
admitted by Mr. Norman himself before the Court of the Bank on March Zl, 1930, and
before the Macmillan Committee of the House of Commons five days later. On one
occasion, just before international financial capitalism ran, at full speed, on the rocks
which sank it, Mr. Norman is reported to have said, "I hold the hegemony of the world."
At the time, some Englishmen spoke of "the second Norman Conquest of England" in
reference to the fact that Norman's brother was head of the British Broadcasting
Corporation. It might be added that Governor Norman rarely acted in major world
problems without consulting with J. P. Morgan's representatives, and as a consequence he
was one of the most widely traveled men of his day.
The Development of Monopoly Capitalism
This conflict of interests between bankers and industrialists has resulted in most
European countries in the subordination of the former either to the latter or to the
government (after 1931). This subordination was accomplished by the adoption of
"unorthodox financial policies"—that is, financial policies not in accordance with the
short-run interests of bankers. This shift by which bankers were made subordinate
reflected a fundamental development in modern economic history—a development which
can be described as the growth from financial capitalism to monopoly capitalism. This
took place in Germany earlier than in any other country and was well under way by 1926.
It came in Britain only after 1931 and in Italy only in 1934. It did not occur in France to a
comparable extent at all, and this explains the economic weakness of France in 1938-
1940 to a considerable degree.
International Financial Practices
The financial principals which apply to the relationships between different countries
are an expansion of those which apply within a single country. When goods are
exchanged between countries, they must be paid for by commodities or gold. They
cannot be paid for by the notes, certificates, and checks of the purchaser's country, since
these are of value only in the country of issue. To avoid shipment of gold with every
purchase, bills of exchange are used. These are claims against a person in another country
which are sold to a person in the same country. The latter will buy such a claim if he
wants to satisfy a claim against himself held by a person in the other country. He can
satisfy such a claim by sending to his creditor in the other country the claim which he has
bought against another person in that other country, and let his creditor use that claim to
satisfy his own claim. Thus, instead of importers in one country sending money to
exporters in another country, importers in one country pay their debts to exporters in their
own country, and their creditors in the other country receive payment for the goods they
have exported from importers in their own country. Thus, payment for goods in an
international trade is made by merging single transactions involving two persons into
double transactions involving four persons. In many cases, payment is made by involving
a multitude of transactions, frequently in several different countries. These transactions
were carried on in the so-called foreign-exchange market. An exporter of goods sold bills
of exchange into that market and thus drew out of it money in his own country's units. An
importer bought such bills of exchange to send to his creditor, and thus he put his own
country's monetary units into the market. Since the bills available in any market were
drawn in the monetary units of many different foreign countries, there arose exchange
relationships between the amounts of money available in the country's own units (put
there by importers) and the variety of bills drawn in foreign moneys and put into the
market by exporters. The supply and demand for bills (or money) of any country in terms
of the supply and demand of the country's own money available in the foreign-exchange
market determined the value of the other countries' moneys in relation to domestic
money. These values could fluctuate—widely for countries not on the gold standard, but
only narrowly (as we shall see) for those on gold.
The Foreign Exchange Market Acted as Regulator of International Trade
Under normal conditions a foreign-exchange market served to pay for goods and
services of foreigners without any international shipment of money (gold). It also acted as
a regulator of international trade. If the imports of any country steadily exceeded exports
to another country, more importers would be in the market offering domestic money for
bills of exchange drawn in the money of their foreign creditor