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By FREDERIC C. HOWE. An element in the American patriotic programme is the organization of corporations for the promotion of overseas finance, under the title wrongly given to it of overseas trade. Its first expression is a gigantic $50,000,000 “American International Corporation” organized by the 'same group in New York that controls the munition firms, that is financing the present war for the allies, and that is backing the preparedness movement. According to its promotors, the movement is to enable the United States to take a larger part than heretofore “in the industrial development of other countries where capital is needed.”

The countries "where capital is needed” are not Great. Britain, France and Germany, the great investing, nations of Europe. The countries "where capital is needed” are Mexico, Central and South America, Morocco, Tunis, Persia, Africa, China and the insular possessions of the United States and elsewhere. They are the countries into which the financiers of Europe have dragged their foreign offices, their diplomacy, and finally their navies for the protection of their shady investments.

"Wealth is accumulating," so the announcement of the new corporation reads, “so rapidly that a portion of it can be spared for investment abroad. The experience which our people hav had in large scale production and in extensive construction work, has especially fitted us to carry on development work in other countries.”

The Crime of Surplus Wealth. "Surplus wealth” invested in weaker countries is the cause of more crimes, of the destruction of the liberties of more peoples, of the wastage of more men and wealth than any other single cause in the present generation. “Surplus wealth” invested abroad by the financiers of London, Berlin, Paris, Petrograd and Vienna is one of the hidden causes lying back of the present European war.

“Surplus wealth” lured Great Britain into Egypt. The English financiers made a loan to the Khedive in 1873 of $410,000,000. They gave the Khedive only $105,000,000 and kept $305,000,000 as security. “Surplus wealth” bankrupted that country. It destroyed Egyptian independence; it was

followed by intervention and the bombardment of Alexandria to protect the loan. European contractors overcharged the Khedive from 80 to 400 per cent on construction work, and the creditors sometimes got as much as twenty-five per cent interest on their loans. This was the beginning of financial imperialism thirty-three years ago.

“Surplus Wealth” led France into Morocco. In six years time the indebtedness of the Sultan to the European financiers was increased from $4,000,000 to $32,000,500. The Sultan received but a small part of the loan. He went bankrupt. He could only pay the interest by wringing it from the wretched natives who finally revolted. France intervened at the demand of the bankers. She occupied Morocco contrary to her pledge to Germany and England. Thousands of Moors were slain. Germany sent a gunboat to protest. Europe was on the verge of war in 1911 through the greed and dishonesty of the French bankers. The Morocco incident is one of the hidden causes of the present European

war. •

"Surplus Capital” lured Germany into Turkey. There were railroads, mines, docks, harbors, and trading concessions waiting to be exploited. The banks earned $25,000,000 commissions on building the Bagdad Railway, and besides saved $45,000,000 more in the cost of construction; all of which was charged to the Turkish Government. The banker was followed by the Kaiser and his armies. Turkey has lost her independence; the Balkan States have been embroiled, and Europe is now at war over the conflicting interests of England, Germany and Russia in Turkey.

"Surplus Capital” negotiated the Six Power Loan to China. China wanted but $30,000,000. The great banking institutions of the powers formed a combination and insisted that she take $300,000,000, or ten times her needs. The loan was accompanied by demands by the bankers for control of the internal administration and revenue system of China. It struck at her very life, and China declined the terms.

"Surplus Wealth” aided in strangling Persia at the hands of Russia and England. It ended the independence of Tunis. According to President David Starr Jordan, the Italian war against Tripoli had its motive in the speculations of the Bank of Rome. In the Balkan war "the final victory rested with the French bankers who furnished the war funds.' Turkey in Asia, he says, is dominated by the Deutsche Bank, that nation within a nation, which replaces the Sultan as master of the rest of his domain, and which drains for itself the riches of the land, exhausting, not the working class alone but a whole nation, which is dying from its operations.


"Surplus Wealth" for foreign investment drained France of capital needed for internal development. It weakened her in her war with Germany. The profits went not to the investors but to the banks which negotiated the loans.

Professor John Hobson, the English economist, says: “Adventure, lust for gold, etc., are the fires in the engine of war, but the great financial interests direct the engine."

It was “Surplus, Wealth” invested in South Africa that brought on the Boer war at the instance of the British mine

It was “Surplus Wealth” that led to the spoliation of Mexico, the taking of her lands, mines, oil wells, and the richest portions of the country through bribes and the corruption of the officials of that country.

The Demand for a Powerful Navy. “Surplus Wealth” that can be "spared for investment abroad” gathered together from the savings of millions of people placed by them in the banks of the country, is now carrying on a campaign for dollar diplomacy and the building of a navy, to protect its investments, to enforce its demands, to insure its concessions—too often secured by fraud, by bribery, and corruption, from revolutionary groups and fictitious governments. “Surplus Wealth" seeking profit in foreign lands is carrying on a campaign to send our sons to offer their lives as a sacrificial offering on the altar of profit wrung from weaker peoples.

Financial imperialism began with the occupation of Egypt by Great Britain in 1882. Since that time the doctrine that the flag follows the investor, has loaded the nations of Europe with a crushing burden of armaments that increase year by year with the size of the investments, and the control of the financiers of their respective governments.

If anyone questions the fact that the crushing armaments of Europe are due to the demand of the investors, he need only to compare the growth of expenditure for navalism with overseas finance. “Surplus Wealth” investment began in the nineties on the part of Great Britain, France and Germany. It has increased at the rate of over a billion dollars a year in the last few years. The foreign investment of these three powers alone now amounts to $40,000,000,000.

Note how the expenditure for the navy has coincided with "Surplus Capital” in foreign lands:






Dollar diplomacy, navalism and the exploitation of weaker peoples, which ended finally in the European cataclysm, have gone hand in hand during the last twenty years. The darkest pages of this story will never be written, for the records lie buried in the graves of weak and defenseless peoples in every part of Africa, in Asia, in Turkey, Asia Minor and the Balkans.

Footing the Bill of Imperialism. Now somebody must support the police force that is to protect the overseas financiers; someone must pay for the, army and the navy that is to serve the summons and make the arrests of bankrupt revolutionists and warring weaklings that have squandered the loans that the financiers have supplied to them. If railroad, mining, oil and land grants are revoked, if the natives will not work and turn on the overseer, someone must pay for the cost of restoring order. One would suppose that the financier would pay for his own policing; but no such suggestion has yet appeared in the programme of the big navy men. The programme now before Congress calls for a far simpler means of paying the bills. It is not to be done by the income tax; not by an inheritance tax; not by a tax even on the making of munitions and the things that the financiers own. Rather it is to be done in the good old way described by an honest but indiscreet French financier, who said that the way for monarchs to secure their taxes.was “to pluck the goose without making it cry out.” In other words the taxes are to be gotten by not letting the people know they are paying them. They are to be added to the cost of everything the people

They are to be collected from the comforts and necessities of the people. They are to be taken from sugar, gasoline, the customs and internal revenue taxes, all of which bear almost exclusively on the farmer and the worker. It is not important that no country in Europe has the courage or the meanness to collect so large a part of its revenue from the poor as does democratic United States; it is of no concern that ten-elevenths of our revenues come from taxes on consumption, and only one-eleventh from wealth, as opposed to 45% in Great Britain even before the war broke out. The cost of preparedness, colossal profits for the armament makers, protection to the financier in his foreign exploitation, is to be shifted to the backs of the worker and the farmer, whose sons are further to be permitted to offer their lives as privates in some unknown, uncivilized land where the investments lie.

The plan is so simple. And it has been worked so many times. But heretofore the thimble game has only been


worked in the capitals of Europe, where the people have no say about the rules of the game. But it is being tried in the United States. And behind it there is far more wealth than is concentrated in any group of men in all the world. Possibly that will make up for the fact that they have no Kaiser or Czar, no aristocracy or Junkers to put the programme over. But the game is the same in every particular, and it is the game that has drenched all Europe in blood.


The Cost of Militarism. During the ten year period, 1905-1914, preceding the present war, the military appropriations, exclusive of war pensions, of the eight foremost militarist nations of the world, in millions of dollars, were as follows:

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The foregoing table shows that the United States ranked third in the race for military preparedness prior to 1915. As the present appropriations for army and navy have been doubled by Congress, this country is likely to lead the whole world in waste for militarism.

Moreover, this table shows that Russia, whose military and economic strength has partially broken down in the present war, was the leading preparedness country in terms of money prior to the war.

Perhaps a better picture of the terrible waste of militarism is shown by the cost of thirty years armed peace to the five great militarist powers of Europe compiled by the World Peace Foundation,

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