The Toronto TELEGRAM of October 5th, in its Business-Finance-Industry section, reports the formation of a new 'Canadian' company Trans-oceanic Development Corporation, Ltd. This corporation is to be financed by such well-known interests as Kuhn, Loeb and Co., S. G. Warburg Co., and the Rockefeller and Rothschild interests. The purpose of this company is re- ported as being for "acquiring equity investments in countries other than Canada and the United States."
Because of the significance of this announcement, we are republishing the following article which appeared in the October 28th issue of the well-informed British weekly, CANDOUR.*
No item of news for a very long time has been of greater interest, or of more marked significance, than the announcement that certain "leading banks and finance houses in New York, Boston, Toronto, Montreal, London, Paris, Amsterdam, Brussels, Zurich, Frankfurt, Hamburg, Cologne and Curacao" have formed the Transoceanic Development Corporation Ltd., which is to operate from Canada. The most important of the New York participants is the firm Kuhn, Loeb & Co., while the London participants are S. G. Warburg & Co., N. M. Rothschild & Sons, and Helbert, Wagg & Co. Kuhn, Loeb is to furnish the chairman, in the person of its partner, Sir William Wiseman, while the chairman of the Portfolio Committee is to be Mr. Siegmund Warburg. It is reported that while Transoceanic's purpose is to acquire selected equity investments in countries other than Canada and the United States, its charter makes for maximum elasticity. It empowers the company not only to invest in existing companies, but also to promote, finance and develop new enterprises. That one can well believe.
The formation of the Transoceanic Development Corporation is not the first occasion when the names "Kuhn, Loeb & Co." and "Warburg" have been associated. During World War I two members of an older Warburg generation, Paul and Felix, were both members of "Kuhn, Loeb" and both animating spirits of the Federal Reserve system, which was helping to finance the American war effort against Germany while a third brother, Max, was in Hamburg helping to finance the German war effort against, among others, America. Paul Warburg, with Jacob Schiff, the head of "Kuhn, Loeb", and Max Warburg, even though divided by an ocean and a war, had the family happiness of combining to finance the overthrow of the Czar and institute the Soviet regime. As Sir Cecil Spring Rice, British Ambassador to Washington, has placed on record that Paul was the Fed- eral Reserve Board, and as Rufus Isaacs, Sir Cecil's successor, entered the money-marked for a thousand million pounds loan for Britain, it requires no great acumen to track down the British Government's astonishing action in granting safe-conduct to Trotsky to return to Russia from New- foundland and take his full part in the butchering of Britain's Russian allies. At the war's end the Warburgs of New York and Hamburg had the still closer family felicity of coming together at Versailles as financial advisers to victors and vanquished, and to engage in intensive lobbying for the recognition of the Bolshevik regime.
When President Wilson was overthrown on his return from Versailles, most of the policies which stood in his name went down with him, including his fondness - basically the fondness of his international advisers for the bloody-handed Bolshevists. Thereafter Congress imposed a ban upon dollar loans to Russia, which meant that the financial sponsors of the Red Revolution for twelve long years were put to the inconvenience of having to feed money to the Soviet Union through London, Paris and Hamburg. Then Franklin D. Roosevelt became President of the United States and once again the Red sky was all ablaze with joy. The Soviet Union was recognised, dollars flowed directly from New York, and the Wall Street-Kremlin axis was restored to such good working order that in World War II one could be forgiven for supposing that the United States Government was a sub-department of the Union of Soviet Socialist Republics.
This majestic accord lasted until the end of 1945 when either something went wrong in the relationship or else the decision was reached that more immediate advantages would accrue to both "sides" by mopping up their "partners" under the camouflage of a cold war than by openly uniting to swallow the world. Even after the official "coldness" began, however, huge quantities of Unrra supplies, paid for by the West, were dumped behind the Iron Curtain, suggesting that the Soviet's financial patrons were still looking after their own. Moreover, when Marshall Aid was instituted, instead of being a device to build up the West against the menace of the East, as is now lyingly proclaimed, it was hoped that the Communist countries would accept this aid in vast bulk, and Czechoslovakia had even made an agreement to this effect when, for some reason as yet not fully understood, Moscow intervened to force her withdrawal.
No less significant is the fact that ever since the Morgenthau financial plan, revealed in the Yalta documents, to make a ten billion dollar loan to the Soviet Union, the idea of such large dollar loans to Russia has been a recurring theme in the propaganda of the spokesmen of international finance. The reason is fairly obvious. Loans and aid to Western Europe, for the time being, are more or less played out: Congress has grown in- creasingly weary of them. The financing of "under-developed territories," moreover, has reached - in my own view it has probably passed -saturation-point in relation to existing or readily trainable skills. Thus the attraction of a really big loan to the Soviet Union, and of an only less big loan to Red China, is something that makes an immense appeal to the money lenders on purely financial grounds, irrespective of whether or not some simulacrum of the original political glow remains in the minds of any of the boys who will hope to be handling the credits. In this last connection I would again warn readers against the dangers of making false associations. Jacob Schiff and Paul and Felix Warburg have gone from our sublunary scene and there is no evidence that the enthusiasms of those who stepped into their shoes follow the same pattern. Sir William Wiseman, who had much to do with British intelligence in the United States during World War I, has been with Kuhn, Loeb a sufficiently long time to know all about its old Soviet fixation, but he may quite conceivably have changed his own mind. The firm of S. G. Warburg, to the best of my knowledge, has never been mentioned in this particular context, nor have N. M. Rothschild & Sons. The names are none the less interesting, the more so because many of the wider interests of the Rothschild family as a whole have for very many years been said to find expression — and camouflage — in the Kuhn, Loeb set-up.
There is one thing of which I am quite certain. It is that when President Eisenhower left Sir Winston Churchill after their West Indies meeting, two years ago, to fly home and make his dramatic "atoms for peace" proposals, the reason was not that this very simple soldier thought it would be a jolly thing to do, but that those whose nominee he is in particular Mr. Bernard Baruch - consider that the time is ripe to end the cold war and make loans of staggering dimensions to the Red Empire. I honestly believe that all the claptrap about the "spirit of Geneva" and the rest of it have no meaning apart from a resumption of lending to Moscow and Peking. Who more suitable to make the necessary moves than un un- suspecting "Republican" President who has been built up by the Money Power to the dimensions of a great national hero, just as the rebel against the fiats of the Money Power, General MacArthur, has been progressively diminished in public fame? Whoever can say with precision what Baruch's own political ideals may be is a very clever man, but as far as some of the others are concerned it is a safe assumption that they have a fond feeling for Soviet Russia.
Experience has taught the Soviet Union's Wall Street backers that pro-Soviet policies in America tend to create strong anti-Soviet reactions in American patriots, as witness the revulsion of feeling which led to Wilson's overthrow and thirty years later the determination manifested by decent and courageous citizens to clear up the suppurating mess of treason left behind by the Roosevelt regime. Is it not possible that the "spirit of Geneva," if drunk to excess, might lead to as a violent hang-over, with a Congressional decree forbidding the huge loans to the Soviet Union and Red China which are undoubtedly contemplated? Were that to happen, would it not suit International Finance very well to have an organization based on foreign soil, preferably in a country where there is little or no likelihood of a Right-Wing opposition coming to power to impose a like ban, so that the shining ideal of keeping the Soviet tyrants well supplied with funds should not be denied its satisfaction? Would the Transoceanic Development Corporation Ltd. not be the perfect organisation for such a purpose? Is it for such a reason that Mr. Lester Pearson, always a Kremlin favourite, undertook his recent visit to Moscow?
I do not know the answers, but I would like to know. Pearson made a queer remark when in Russia. According to the Daily Telegraph:
"Mr. Khruschev gave some 'friendly advice' to Mr. Pearson: that Canada should leave the (NATO) organization. Mr. Pearson said it might be possible to arrange this, but the West would have to ask Russia to leave certain things."
Candour is no enthusiast for NATO, but it is interesting to learn that continuance of its obligations is thus determinable. What is the dropping of it worth? The kindly acceptance of Mr. Morgenthau's offer of a ten billion dollar loan? Or has the amount since been raised?
If the Transoceanic Development Corporation avers that it has no interest in such a project — which would be surprising — I should still advise my readers to watch with keen interest the activities of this fascinating body. Never before has there been so mighty a gathering of the Jewish money-lending clans, and the real reason for it, should by guess be wide of the mark, has still to be disclosed.
A. K. CHESTERTON
*Published weekly 857 Fulham Road, London, S. W. · 6, England; 25 shillings ($3.60) a year.
The author of this article in CANDOUR is A. K. Chesterton, profound student of world affairs and brilliant journalist, formerly with the Beaverbrook papers.
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