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The French king, Louis XV was a still a child and obviously was not very interested in financial issues. His Regent, Philippe II, Duke of Orleans, on the other hand, seized on this brilliant idea. He ordered that bank notes were to be accepted as payments as well as coins. In 1718 Law's bank was renamed into Banque Royale.[84] Although, essentially, it was the same 'joint stock company' where shares were divided between cunning bankers and the Royals. From now on the military and diplomatic rivalry between England and France also takes a secret financial turn. Two groups of bankers who received two different governmental protections were fighting each other for the right to uncontrollably print unsecured money. And through that to rule the whole world.
But we have been distracted. Let us go back to the French attempt to clone the 'English idea of paper money. The story of rapid development of England during the reign of William started repeating itself in France. It is not surprising – your personal economy will immediately flourish as well if your find a briefcase full of money in the street. The Central Bank of France was very successful. In one fell swoop, John Law solves all the financial problems of the royal house: he lends 100 million livres to the Government at a 3% annual interest rate. For reference: when the Sun King died there was as little as 700 thousand livres in the treasury.[85] At the end of 1716, on the other hand, when John Law turned his printing machine on, the budget deficit had reached 140 million livres[86] and France could now proceed with its global expansion as it had the money for it.
The French copied the system established by the English not only in its essence but also in details. The authorities leased to John Law the exploitation of gold deposits in Louisiana as well as all trade overseas. It would all be dealt with by the India Company which was a full copy of the British East India Company. Shares of the new company were at first sold to anyone and later on, only to those who paid with bank notes which could be received in exchange for gold coins. 'It turned into a competition – who could get rid of their gold first'.[87] But the success did not last long, in fact it was surprisingly short. The credit and monetary basis of the French expansion was destroyed within literally a few months.
This is the chronology of prosperity and immediate death of the Bank of England's clone in France. In January 1720 banker John Law rises on the surge of phenomenal success of his creation and is put in charge of controlling all financial affairs of France, since the Bank which he was the head of had just lent France 100 million livres. And at this point something terrible happened. 'Immediately and very rapidly disturbing news spread around Paris and the whole city found itself in the state of atrocious panic', recalls the French writer Guy Breton in his book 'Love Stories throughout the History of France'.[88] And already in early 1720 those who wanted to exchange their paper money back to gold started applying great pressure on the bank. At first, the exchange had to be slowed down and later on frozen altogether.[89] When did it happen? In February-March, 1720.
Since it all happened such a long time ago, it is hard to track how the panic among shareholders was organised, but in my opinion those technologies were not very different from the ones used today. I would like to draw your attention to the fact that it happened three years after the Bank started operating, which means that at the beginning it was doing pretty well. And then, all of a sudden, things got worse – after the record-breaking loan of 100 million livres received by the government. Was this a coincidence? Judge for yourself – the blow was quick and merciless. The Bank that issued 3 billion worth of paper money under the warranty of 700 million in coins was unable to pay back. But the French Government did not give up without fighting. And it managed to find a very 'original' way out. As the population would not want to use paper bills and preferred coins… using coins should be prohibited. 'The decree of 11th March 1720 banned using coins from 1st May onwards; if found on someone, coins were to be confiscated'.[90]
You can imagine the reaction this decision caused in France. Of course, universal jubilation and enthusiasm of the public. After this decree, the popularity of paper money went down to the very bottom, as well as the popularity of the royal power. Everyone started hunting the forbidden coins and avoiding the allowed banknotes. And this quickly ended in a catastrophe. The next decree published on 22th May 1720 announced a reduction of the nominal rate of banknotes by half.[91] Therefore, those who obeyed the previous decree and had started using paper money immediately lost half of their savings. Then, on 10th October 1720 a third decree was published which announced that banknotes would no longer be used after 1st November 1720. Small banknotes were to be exchanged for state bonds with another half-reduction of the nominal rate.[92]
As a result, obedient citizens were quickly robbed twice. Obviously, the royal government which did all these tricks (very similar to Russian reforms) became very unpopular. It was then that the hatred for the French monarchy was planted which would lead to a revolution in 1789 and would completely destroy the royal authority. In November 1720 the Central Bank went bankrupt and its founder had to flee from France a month later. It would be interesting to find out where, because it would shed light on many things…
I do not know much about the following years of the founder of the 'printing machine' in France. But I do know what happened to the founder of the Bank of England. As we remember, William III of Orange, the English king, had a deal with bankers. And he kept his promises. Possibly because his death was also very timely. In March 1702 he passed away in the Kensington Palace of… (not again?!) injuries he got as a result of a fall off his horse.[93] Could this have happened? Yes. Only two facts seem suspicious: the similar death of the Duke of Berry and the official reason of William's death as it was announced. What was it exactly that caused his death? William died of pneumonia, which was a complication to a broken shoulder, which the King broke when he fell off the horse. Who would have thought that a broken shoulder can start pneumonia? What is the connection between a fracture and pneumonia? It is all rather interesting, is it not? And rather suspicious, too…
The founder of whatever it is, is needed for a figurehead. It is this king that signed all the laws that the bankers needed, he gave them everything they needed at the time. The following kings would receive the established system as legacy. And the secrets of William's agreements died with him and his descendants were left with the King's stern look from the full-dress portrait. The Bank of England would be a given entity for the new monarchs, certain legacy and an irreversible decision of their ancestor.[94]
It was high time they started thinking of further steps in establishing world hegemony. There had always been one means to achieve that – by declaring a war. The British elite, led by bankers, added another one to the world's geopolitical arsenal, and it was special operations. Both should be generously accompanied with money, seeing that now it was made out of nothing. The War of the Spanish Succession was the beginning of a long way of the 'printing machine' to the July morning in 1944 in Bretton Woods, where the pound sterling passed the baton to the dollar. When it was time to change location the 'printing machine' moved overseas where it was more secure.
But before that there was WWI which destroyed the golden rouble and the golden Deutsche Mark. They were followed by the currencies of the Austro-Hungarian Empire and the Ottoman Empire. Only one step was left till the world supremacy, only one world war. And the scenario of the Second World War which was written in London was very different from the one that happened in reality.
…And the most important rule is that there are no rules.
3
It is always pleasant to fight with someone else's fists. The advantages are numerous: all the losses are incurred by someone else's economy all the crimes are committed by someone else's army. Another country spends the money, another people exhausts its economy. And can you fight without stressing your own economy? No, this is simply not possible. Military expenses can bring any successful nation to its knees. This is the reason why it has always been important to enter a war last. Therefore, no matter how you look at it, it is good when someone else is fighting instead of you. This country buys weapons and equipment, food and other goods. During wars prices always grow, factories always work at their full capacity, the economy develops – and all of this happens to the country which is not at war, of course.
But this is not the most important thing. The most important thing is that gold flows in the right direction. In order to start a 'printing machine' on a global scale, to get an unprecedented emission of hard currency flowing, it was necessary to eliminate the possibility of creating a currency secured by gold. For this purpose it was required to use up practically all the world's reserves of the yellow metal. Such a possibility could be provided by a world war and preparations were being made. A new hegemony of a global currency was to crown an unprecedented war, where any power capable of resistance would be ground to dust. Millions of Europeans were to perish so that all nations would agree to abandon their sovereignty.
But there was one problem. The advantages of standing aside and joining the fight at the last moment were too obvious. As well as the disadvantages of a gruelling war. Therefore, there would be no fools willing to start a war. Everyone wanted to be 'second'. So, what should be done in such a situation? One should help someone else to be 'first'…
Practically everyone must have heard of the Molotov-Ribbentrop pact. Have you ever wondered why all other treaties are called treaties and only the treaty of non-aggression between Germany and the Soviet Union persistently called a pact? And why Western historians and our liberals keep trying to paint this document and the story of its execution black? Because this pact crossed out the scenario of a world war drawn up in London. History started developing in a completely different direction. By a miracle the Anglo-Saxon world retained its hegemony over the planet; this miracle was Hitler's unrestrained Anglophilia…
But let us move on to the facts. When you next hear someone say that Stalin is to blame for initiating the Second World War, that it is the pact with Hitler that helped it to begin, remember that these are all lies.[96] If one studies the facts scrupulously enough, one will realise that it is simply impossible to blame the USSR for initiating the Second World War. Therefore, one could only assert the latter maliciously or out of ignorance.
It was not until 1st April, 1939 that Hitler, who had had no plans for a war against Poland, ordered them to be drawn up.[97] Fall Weiss, which was accepted ten days later, specified the date of the strike against Poland – 26th August, 1939. That means that in April, when there had been no negotiations between the USSR and Germany, Hitler was already planning to destroy Poland and was planning to do so in August. The text of Hitler's plan contains the following phrase: 'Russia's interference, if it were capable of it, would still be very unlikely to help Poland…'[98] This suggests that in April 1939 Hitler saw the USSR as his potential enemy. What does it mean? It means that when setting the date of the beginning of the war, the Führer was not guided by signing a pact with Russians. What is more, no one in Germany could even have dreamt of such a pact back in April 1939. The USSR signed the non-aggression treaty with Germany on 23rd August, 1939. It would seem that it should have let Hitler off the leash and one would have expected the Germans to proceed with their plans concerning Poland straight away. And yet, they did not. Two days after executing the treaty with the USSR, the German leader altered his plans and changed the planned date of attacking Poland. On 25th August, 1939, Hitler postponed the invasion until 1st September, 1939. After signing the pact in Moscow, Hitler changed the date of the beginning of the war. AFTER that! Thus, we can see that in defining the date of the first strike Hitler was always guided not by his arrangements with the USSR but by completely different motives.
And now let us try to dot all the is and cross all the t's. Let us pose one direct question: did the non-aggression treaty executed between Hitler and Stalin make defeating Poland easier? The honest answer is: it certainly did. And now let us pose another direct question: would Hitler have declared war on Poland without a non-aggression pact with the USSR? The facts say unequivocally that he would have done. Preparations for war were going at full speed and did not depend on negotiations with the Kremlin.[99]
Now, another couple of questions. What is the main task of the leader of any nation? Is it the prosperity of their own country and people or the prosperity of a different country and people? What is more important for this leader, saving their own people from participating in a war and avoiding aggression from another country or 'world peace'? There can be only one honest answer: the head of state is obliged to use all possibilities to avoid aggression against their country. And this is a duty of every head of state.
So, what country should have Joseph Stalin thought of and cared for: the USSR, Poland or another country?
It was the USSR, and the USSR alone, that Stalin had to protect against aggression. The fate of Poland, which was an overtly anti-Russian state and before April 1939 was even planning to join Germany in a war against Russia, was not his concern. This country had its own government to worry about its fate. And this government believed the promises of England and France and did everything it could to make the war between Germany and Poland happen.[100]
The non-aggression pact between Germany and the USSR was a brilliant manoeuvre performed by Russian diplomats who thus managed to ruin the game of the Anglo-Saxons completely and avoid an offensive operation against the Soviet Union. The fact that Hitler did later attack Russia is not due to an error or a mistake made by the Soviet government but an irrational, unpredictable and fundamentally stupid act on the part of the Fuhrer.[101] A war pursued by our country on two fronts against Japan and Germany, as was planned in London, never happened at all. Stalin managed to change the future scenario drawn up by the Anglo-Saxons and not become the first to fight and, consequently, to bleed. This is the main reason why the treaty signed by Molotov and Ribbentrop became the most hated diplomatic document in Western historiography.
Since we are on the subject, let us dispel a couple of the nastiest myths about this treaty.
Myth One: signing a treaty with Hitler's Germany was something out of the ordinary. This is not true. Pacts, or treaties with Hitier, by August 1939 had been executed by England, France, Estonia and Latvia. The list can be continued. And the first country to do it was, in fact, Poland. In 1934 she signed a non-aggression treaty with the German Chancellor, Adolf Hitler. So, while Poland was the first to sign such a treaty, the USSR is the last one on the list. Therefore, there was nothing special in signing a treaty with Germany. In 1939 it was a nation recognised by the global community and at its head was one of its leading politicians. By conclusion,the USSR had the full moral and judicial right to sign a non-aggression treaty with Germany.
Myth Two: there were 'secret protocols' to the treaty signed between Moscow and Berlin. Firstly, having secret articles or secret treaties is a common diplomatic practice of any era. They have been signed by lawful monarchs and presidents and not only by villains and dictators. For example, the treaty between Russia and France of 1894 signed by Emperor Alexander III and the French president was completely secret. Russian tsars and French presidents knew its contents but the French Parliament was not familiar with its articles. The agreement of 1905 between the USA and Japan was just as secret. The two countries divided spheres of influence in Asia based on the results of the Russo-Japanese war. Japan abandoned its aggressive intentions concerning the Philippines, while the States recognised the right of the Japanese to append Korea.[102]
Secondly, it was not only Russia and Germany but also other countries that had secret protocols within their treaties in 1939. For example, the guarantees given to Poland by Britain in April that year were also accompanied by a secret protocol.[103] German treaties with Estonia and Lithuania also contained a secret article. According to this article, the Baltic states were 'to take all military security measures against Soviet Russia as agreed with Germany and in compliance with its advice'.[104]
Thirdly, there is still no convincing evidence that the secret protocols within the non-aggression pact with Germany existed at all. The USSR recognised that they had existed at the Second Congress of People's Deputies[105] after a report made by a commission headed by the foreman of perestroika, Alexander Yakovlev. The thing is that neither in Russian archives nor anywhere abroad can one find the originals of these notorious secret protocols;[106] only copies of copies' were presented. But Gorbachev and his subordinates had already taken a firm tack in the direction of destroying the country. Destroying the country's history blackening and rigging its past are major elements of destroying a country. Therefore, it is hardly surprising that despite lacking the originals, the commission found it 'possible to admit that the secret protocol of 23rd August, 1939 had existed'.[107]
The conclusion is that the very existence of the protocols has not been proved. But even if they had indeed been signed, this was a regular political and diplomatic phenomenon.
The Soviet Union is not to blame for starting the Second World War. If we wanted to blame someone, that would be the Government of Germany, as well as the British and US governments that had been investing enormous amounts of money in German industry for six years. Here we should make a little remark. Adolf Hitler was put in charge of Germany by London and Washington: in other words, by the owners of the 'printing machine'.[108] His task was to start a war against the USSR and to conquer vast territories and vast treasuries full of natural resources as well as to eliminate a dangerous alternative plan of economic development. For this Germany was promised to be made an equal partner of the Anglo-Saxons at the global table. To enable Hitler to fulfil this task, enormous amounts of money were invested in Germany and she was supplied with the latest industrial equipment. The West was afraid and did not notice the militarisation of Germany, which in just six years (1933-1939) created an army from scratch and equipped it with latest systems. Austria and the Czech Republic were surrendered to Hitler to create a big army, and these two countries would provide millions of conscripts and the huge Czech Skoda military plant.[109] Even Poland was Hitler's loyal ally and was preparing a joint attack against Russia.
And when the time had come to realise the plans, Hitler started his game. Instead of building up a conflict with the USSR around the Ukraine, he resolved it.[110] The situation was as follows: having acquired everything he could have possibly acquired from the West, Hitler deviated from the prepared scenario, according to which a war was bound to begin in 1939. It was not without reason that the American magazine Time called Hitler 'Man of the Year' in 1938.
Then London decided to alter the strategy slightly. The English knew perfectly well that Hitler was going to attack Poland. And they were not trying to prevent this attack. The idea was different: having defeated the Polish, the German army would have turned up at the Soviet borders. The tensions between the two countries and the mutual propaganda between the communists and the Nazis were to guarantee that a war between the USSR and Germany would definitely break out. To make it work out it was necessary to:
● promise support to Poland, so that it becomes uncompromising, and never provide any;
● promise Hitler that there would be no support for Poland and he would be 'granted a pardon if he starts a war against the Russians;
● play games with the Russians and linger with negotiations until Germany attacks Poland.
These are the three points on which English diplomacy placed emphasis throughout spring and summer 1939. There was also a fourth task: to keep an eye on the Russians and Germans to prevent them from making any deals. Therefore, each time Berlin and Moscow resumed their relations, the British immediately became more active…
And now let us move on to the story of the signing of the non-aggression pact itself between Germany and the USSR. There are some fascinating details that do not get spoken about aloud very often, if at all. These tiny details can tell us much more about that period and its tensions than numerous thick books. To begin with, I will give you an irrefutable historical fact: it was not Stalin but Hitler who initiated the warm-up of German-Soviet relations. As early as 22nd December, 1938 the trade mission of the USSR in Berlin received a proposition to draw up an agreement. After some probing and 'exchange of opinions', contact ceased. As this book is not on the history of diplomacy, we can omit several months and proceed straight to the climax.
On 2nd August, 1939 the envoy of the USSR, Astakhov, was summoned by the head of the German Foreign Ministry, Joachim von Ribbentrop. The essence of his words was that there were no problems between Berlin and Moscow that could not be solved.
On 5th August, 1939 British and French delegations set off for Moscow to participate in negotiations. The English are not in a particular hurry. They do not go by air… but by sea. And not by a military fast ship but by a low-speed steamer, City of Exeter. As a result, instead of several hours, getting to Moscow takes seven days (on 10th August, 1939 the allied delegation arrives in Leningrad).
On 11th August, 1939 Hitler summons the League of Nations High Commissioner, Carl Burckhardt and asks him for a 'favour': to help explain to the West that everything that Hitler was doing was aimed against Russia. And if this were to fall on deaf ears then he would have to come to terms with Russians.
On 12th August, 1939 the first official meeting of the British, French and Soviet missions took place. Immediately it turned out that the head of the British delegation, Admiral Drax, did not have any letter of authority. The head of the French delegation, General Doumenc, was only authorised to reach an agreement and not to sign any resulting documents. When asked by the head of the Soviet delegation, Voroshilov, whether Poland and Romania would let the Soviet troops into their territory in order to fight against the German aggressors should they annexe these countries, they did not produce any definite answer. This is the very lingering that has been mentioned above. The English did not need to hold on and sit in session for too long: only two weeks were left until Hitler's planned attack against Poland.
On 15th August, 1939 at a meeting with Molotov, the German ambassador, Schulenburg, read out a note which essentially said that it was 'possible to restore good mutually beneficial cooperation' between the two countries and raised a question regarding the arrival of a high German official in Moscow. Incidentally, he was not authorised to give the note to the Russians so that no evidence would be left behind.[111]
The fact that Hitler had planned an attack against Poland for the 26th August, 1939 was known not only in London but also in Moscow. Therefore, it was decided to buy some time and play on the Germans' nerves. At the same time, this would let them find out how serious their intentions were. So, having had a lovely chat with the German ambassador and having realised that the Germans were under time constraints, Molotov said that there was no rush with the visit, ensuring they did not end up just having talks in Moscow without making any particular decisions.
On 17th August, 1939 Schulenburg saw Molotov again. The head of the soviet Foreign Ministry said that Moscow understood why Germany would really want to improve its relations with the USSR. But then a list of previous offences followed. Yet, 'since now the German government has decided to change their policy', it should prove that its intentions are serious and execute economic contracts. That would mean giving the USSR a loan of 200 million marks for seven years and supply quality equipment for this amount. This contract would come first and then it would be possible to discuss a non-aggression treaty.[112]
On 19th August, 1939 Hitler and Ribbentrop sent Schulenburg to Moscow again. He passes a proposition to sign a treaty which would consist of two provisions:
Germany and the USSR shall not under any conditions resort to the use of violence against each other. The proposed duration of the treaty was 25 years.
As an addition Germany was to use its influence to help improve the relations between Moscow and Tokyo. The last provision was crucial. It meant that signing the treaty with Germany would also solve the USSR's second problem, that being the constant aggression from Japan. This was a very serious argument. Incited by Great Britain and the USA, Japan invaded China back in the thirties[113] and started gradually biting off bits of Chinese land approaching the Russian borders. According to the English plan, the USSR was going to be attacked by Japan in the east and Germany in the west. This was to be a two-front war for the USSR, not for Germany. And the first front had already been opened. On 11th May, 1939 a regular Japanese army attacked the Mongolian frontier posts.
When the German ambassador proposed to Stalin the signing of the non-aggression pact, Tokyo was considered to be Berlin's ally. Meanwhile, heavy fighting was talking place at the Khalkhyn Gol River in Mongolia. The Japanese planned an offensive operation on 24th August, 1939. Instead, it was the Red Army that started an offensive on 20th August, 1939, that is to say on the day after the Germans offered their mediation in reconciliation with Japan. To make the Japanese more willing to negotiate it was necessary to beat them up well first.
To assess the actions undertaken by the Soviet officials properly, one needs to realise that the negotiations with the Germans and the battles with the Japanese were happening at the same time. And Berlin did not just offer its friendship: the Germans could actually persuade the Japanese to put an end to the conflict. Pursuing a war against Russia on its own was an extremely difficult task for Japan, if at all feasible.[114] And a non-aggression treaty between Berlin and Moscow would be a perfect excuse for Tokyo to stop fighting. It would be only natural to ask the following question at this point: was there a different way to influence Japan? No, because it would have required a will to stop the war between the USSR and Japan, and this is exactly what was lacking. The situation was, in fact, quite the opposite: the English were trying to organise a rebellion in the Chinese province of Xinjiang.[115] Why did the British need that? Because it was through that province that the USSR supplied support to China and Russian weapons and counsellors helped to strengthen China, thereby weakening the Japanese troops which confronted the Red Army. By blocking the route by which Russian weapons and equipment were supplied, the English were sabotaging the fight of the Chinese and strengthening the Japanese, helping them to aggravate the conflict with Russia…
Credit where credit is due. Stalin did realise how serious Germany's intentions were and did understand why they were in such a hurry. Therefore, despite the problems with the Japanese, he decided to take advantage of the situation with as much profit for the USSR as possible. The Germans asked to meet a minister in Moscow. The English sent someone with no particular position or authority. The situation was very telling…
During his visit to Moscow, the German ambassador, Schulenburg, received quite a specific response from Molotov: provided that the economic agreements were signed on the same day, 19th August, Ribbentrop could come a week later, on 26th or 27th August. When it was suggested that Ribbentrop could arrive earlier, Molotov objected that it was too early to speak of that before the first stage, that is the economic negotiations, had been accomplished. It was about 3 p.m., 19th August, 1939.[116] The officials in Berlin were panicking: time was running out very fast. The Russians were being polite but did not cast any light upon the situation. And all of a sudden they said that without a loan of 200 million marks there could be no progress in the relations. What was Berlin to do? Did Hitler want to credit Stalin? Of course not. He needed money himself to finance his preparations for a war with Poland. But he had no choice. Stalin used the good old Anglo-Saxon trick in the negotiations: having created a problem, he was 'selling' ways to solve it. Today, the USA funds international terrorism and then fights it.[117] The Kremlin lingered and then suddenly offered to speed up the negotiations through financing the USSR until 1946. And to achieve a positive result, the USSR used a carrot after using a stick. Half an hour after saying that Ribbentrop could come a week later, the German ambassador was summoned to Molotov again.
He was presented with the Soviet project of the non-aggression treaty drafted in compliance with all the rules. This is the version that was signed later on with insignificant amendments. This was an ordinary treaty; there was nothing special about it except for one detail: the draft did not specify that the document would lose become null and void should one of the parties attack a third party.[118] Let us just keep this fact in mind and proceed. This piece of information will be very useful later.
On 20th August (at 2 a. m.) a trade and credit agreement was urgently signed. The USSR was to receive a loan of 200 million marks that the country could spend on German equipment and pay back with raw material and food.[119]
So, Germany did what the Kremlin had been asking for: the economic agreement was signed. Hitler, completely exhausted, went to bed at seven in the morning on 20th August. But there was still no clarity from the Russians and the only date proposed by them for the arrival of the German delegation remained the same: 26-27th August, 1939. This was too late for Berlin. And then Hitler decided to speed things up. On 20th August, 1939 he sat down and wrote a personal letter to Stalin. They had never been in correspondence or spoken before. But Hitler had no time to act according to the official procedures: the attack against Poland was planned for 26th August and there was no time to spare. 'Nevertheless, I repeat my proposition to accept my Foreign minister on 22nd August or 23rd August at the latest'[120], said Hitler in his letter. On 21 August, 1939 at 15:00 the German ambassador, Count Schulenburg, presented Hitler's letter in Moscow. Just two hours later, at 17:00, Vyacheslav Molotov gave the German ambassador the response of the head of the USSR.[121] Stalin replied practically immediately.
But we have been distracted. Let us go back to the French attempt to clone the 'English idea of paper money. The story of rapid development of England during the reign of William started repeating itself in France. It is not surprising – your personal economy will immediately flourish as well if your find a briefcase full of money in the street. The Central Bank of France was very successful. In one fell swoop, John Law solves all the financial problems of the royal house: he lends 100 million livres to the Government at a 3% annual interest rate. For reference: when the Sun King died there was as little as 700 thousand livres in the treasury.[85] At the end of 1716, on the other hand, when John Law turned his printing machine on, the budget deficit had reached 140 million livres[86] and France could now proceed with its global expansion as it had the money for it.
The French copied the system established by the English not only in its essence but also in details. The authorities leased to John Law the exploitation of gold deposits in Louisiana as well as all trade overseas. It would all be dealt with by the India Company which was a full copy of the British East India Company. Shares of the new company were at first sold to anyone and later on, only to those who paid with bank notes which could be received in exchange for gold coins. 'It turned into a competition – who could get rid of their gold first'.[87] But the success did not last long, in fact it was surprisingly short. The credit and monetary basis of the French expansion was destroyed within literally a few months.
This is the chronology of prosperity and immediate death of the Bank of England's clone in France. In January 1720 banker John Law rises on the surge of phenomenal success of his creation and is put in charge of controlling all financial affairs of France, since the Bank which he was the head of had just lent France 100 million livres. And at this point something terrible happened. 'Immediately and very rapidly disturbing news spread around Paris and the whole city found itself in the state of atrocious panic', recalls the French writer Guy Breton in his book 'Love Stories throughout the History of France'.[88] And already in early 1720 those who wanted to exchange their paper money back to gold started applying great pressure on the bank. At first, the exchange had to be slowed down and later on frozen altogether.[89] When did it happen? In February-March, 1720.
Since it all happened such a long time ago, it is hard to track how the panic among shareholders was organised, but in my opinion those technologies were not very different from the ones used today. I would like to draw your attention to the fact that it happened three years after the Bank started operating, which means that at the beginning it was doing pretty well. And then, all of a sudden, things got worse – after the record-breaking loan of 100 million livres received by the government. Was this a coincidence? Judge for yourself – the blow was quick and merciless. The Bank that issued 3 billion worth of paper money under the warranty of 700 million in coins was unable to pay back. But the French Government did not give up without fighting. And it managed to find a very 'original' way out. As the population would not want to use paper bills and preferred coins… using coins should be prohibited. 'The decree of 11th March 1720 banned using coins from 1st May onwards; if found on someone, coins were to be confiscated'.[90]
You can imagine the reaction this decision caused in France. Of course, universal jubilation and enthusiasm of the public. After this decree, the popularity of paper money went down to the very bottom, as well as the popularity of the royal power. Everyone started hunting the forbidden coins and avoiding the allowed banknotes. And this quickly ended in a catastrophe. The next decree published on 22th May 1720 announced a reduction of the nominal rate of banknotes by half.[91] Therefore, those who obeyed the previous decree and had started using paper money immediately lost half of their savings. Then, on 10th October 1720 a third decree was published which announced that banknotes would no longer be used after 1st November 1720. Small banknotes were to be exchanged for state bonds with another half-reduction of the nominal rate.[92]
As a result, obedient citizens were quickly robbed twice. Obviously, the royal government which did all these tricks (very similar to Russian reforms) became very unpopular. It was then that the hatred for the French monarchy was planted which would lead to a revolution in 1789 and would completely destroy the royal authority. In November 1720 the Central Bank went bankrupt and its founder had to flee from France a month later. It would be interesting to find out where, because it would shed light on many things…
I do not know much about the following years of the founder of the 'printing machine' in France. But I do know what happened to the founder of the Bank of England. As we remember, William III of Orange, the English king, had a deal with bankers. And he kept his promises. Possibly because his death was also very timely. In March 1702 he passed away in the Kensington Palace of… (not again?!) injuries he got as a result of a fall off his horse.[93] Could this have happened? Yes. Only two facts seem suspicious: the similar death of the Duke of Berry and the official reason of William's death as it was announced. What was it exactly that caused his death? William died of pneumonia, which was a complication to a broken shoulder, which the King broke when he fell off the horse. Who would have thought that a broken shoulder can start pneumonia? What is the connection between a fracture and pneumonia? It is all rather interesting, is it not? And rather suspicious, too…
The founder of whatever it is, is needed for a figurehead. It is this king that signed all the laws that the bankers needed, he gave them everything they needed at the time. The following kings would receive the established system as legacy. And the secrets of William's agreements died with him and his descendants were left with the King's stern look from the full-dress portrait. The Bank of England would be a given entity for the new monarchs, certain legacy and an irreversible decision of their ancestor.[94]
It was high time they started thinking of further steps in establishing world hegemony. There had always been one means to achieve that – by declaring a war. The British elite, led by bankers, added another one to the world's geopolitical arsenal, and it was special operations. Both should be generously accompanied with money, seeing that now it was made out of nothing. The War of the Spanish Succession was the beginning of a long way of the 'printing machine' to the July morning in 1944 in Bretton Woods, where the pound sterling passed the baton to the dollar. When it was time to change location the 'printing machine' moved overseas where it was more secure.
But before that there was WWI which destroyed the golden rouble and the golden Deutsche Mark. They were followed by the currencies of the Austro-Hungarian Empire and the Ottoman Empire. Only one step was left till the world supremacy, only one world war. And the scenario of the Second World War which was written in London was very different from the one that happened in reality.
…And the most important rule is that there are no rules.
3
Six Spy Stories, or The Amazing Adventures of Ribbentrop in Russia
The Englishman is superior to the German in one respect – that of pride. Only the man who knows how to give orders has pride.[95]
Adolf Hitler
Analysing results of battles I inevitably came to the conclusion that it was not only courage of infantry and audacity of cavalry and artillery that determined the result of many battles but mostly this damned invisible weapon called spies.
Napoleon Bonaparte
It is always pleasant to fight with someone else's fists. The advantages are numerous: all the losses are incurred by someone else's economy all the crimes are committed by someone else's army. Another country spends the money, another people exhausts its economy. And can you fight without stressing your own economy? No, this is simply not possible. Military expenses can bring any successful nation to its knees. This is the reason why it has always been important to enter a war last. Therefore, no matter how you look at it, it is good when someone else is fighting instead of you. This country buys weapons and equipment, food and other goods. During wars prices always grow, factories always work at their full capacity, the economy develops – and all of this happens to the country which is not at war, of course.
But this is not the most important thing. The most important thing is that gold flows in the right direction. In order to start a 'printing machine' on a global scale, to get an unprecedented emission of hard currency flowing, it was necessary to eliminate the possibility of creating a currency secured by gold. For this purpose it was required to use up practically all the world's reserves of the yellow metal. Such a possibility could be provided by a world war and preparations were being made. A new hegemony of a global currency was to crown an unprecedented war, where any power capable of resistance would be ground to dust. Millions of Europeans were to perish so that all nations would agree to abandon their sovereignty.
But there was one problem. The advantages of standing aside and joining the fight at the last moment were too obvious. As well as the disadvantages of a gruelling war. Therefore, there would be no fools willing to start a war. Everyone wanted to be 'second'. So, what should be done in such a situation? One should help someone else to be 'first'…
Practically everyone must have heard of the Molotov-Ribbentrop pact. Have you ever wondered why all other treaties are called treaties and only the treaty of non-aggression between Germany and the Soviet Union persistently called a pact? And why Western historians and our liberals keep trying to paint this document and the story of its execution black? Because this pact crossed out the scenario of a world war drawn up in London. History started developing in a completely different direction. By a miracle the Anglo-Saxon world retained its hegemony over the planet; this miracle was Hitler's unrestrained Anglophilia…
But let us move on to the facts. When you next hear someone say that Stalin is to blame for initiating the Second World War, that it is the pact with Hitler that helped it to begin, remember that these are all lies.[96] If one studies the facts scrupulously enough, one will realise that it is simply impossible to blame the USSR for initiating the Second World War. Therefore, one could only assert the latter maliciously or out of ignorance.
It was not until 1st April, 1939 that Hitler, who had had no plans for a war against Poland, ordered them to be drawn up.[97] Fall Weiss, which was accepted ten days later, specified the date of the strike against Poland – 26th August, 1939. That means that in April, when there had been no negotiations between the USSR and Germany, Hitler was already planning to destroy Poland and was planning to do so in August. The text of Hitler's plan contains the following phrase: 'Russia's interference, if it were capable of it, would still be very unlikely to help Poland…'[98] This suggests that in April 1939 Hitler saw the USSR as his potential enemy. What does it mean? It means that when setting the date of the beginning of the war, the Führer was not guided by signing a pact with Russians. What is more, no one in Germany could even have dreamt of such a pact back in April 1939. The USSR signed the non-aggression treaty with Germany on 23rd August, 1939. It would seem that it should have let Hitler off the leash and one would have expected the Germans to proceed with their plans concerning Poland straight away. And yet, they did not. Two days after executing the treaty with the USSR, the German leader altered his plans and changed the planned date of attacking Poland. On 25th August, 1939, Hitler postponed the invasion until 1st September, 1939. After signing the pact in Moscow, Hitler changed the date of the beginning of the war. AFTER that! Thus, we can see that in defining the date of the first strike Hitler was always guided not by his arrangements with the USSR but by completely different motives.
And now let us try to dot all the is and cross all the t's. Let us pose one direct question: did the non-aggression treaty executed between Hitler and Stalin make defeating Poland easier? The honest answer is: it certainly did. And now let us pose another direct question: would Hitler have declared war on Poland without a non-aggression pact with the USSR? The facts say unequivocally that he would have done. Preparations for war were going at full speed and did not depend on negotiations with the Kremlin.[99]
Now, another couple of questions. What is the main task of the leader of any nation? Is it the prosperity of their own country and people or the prosperity of a different country and people? What is more important for this leader, saving their own people from participating in a war and avoiding aggression from another country or 'world peace'? There can be only one honest answer: the head of state is obliged to use all possibilities to avoid aggression against their country. And this is a duty of every head of state.
So, what country should have Joseph Stalin thought of and cared for: the USSR, Poland or another country?
It was the USSR, and the USSR alone, that Stalin had to protect against aggression. The fate of Poland, which was an overtly anti-Russian state and before April 1939 was even planning to join Germany in a war against Russia, was not his concern. This country had its own government to worry about its fate. And this government believed the promises of England and France and did everything it could to make the war between Germany and Poland happen.[100]
The non-aggression pact between Germany and the USSR was a brilliant manoeuvre performed by Russian diplomats who thus managed to ruin the game of the Anglo-Saxons completely and avoid an offensive operation against the Soviet Union. The fact that Hitler did later attack Russia is not due to an error or a mistake made by the Soviet government but an irrational, unpredictable and fundamentally stupid act on the part of the Fuhrer.[101] A war pursued by our country on two fronts against Japan and Germany, as was planned in London, never happened at all. Stalin managed to change the future scenario drawn up by the Anglo-Saxons and not become the first to fight and, consequently, to bleed. This is the main reason why the treaty signed by Molotov and Ribbentrop became the most hated diplomatic document in Western historiography.
Since we are on the subject, let us dispel a couple of the nastiest myths about this treaty.
Myth One: signing a treaty with Hitler's Germany was something out of the ordinary. This is not true. Pacts, or treaties with Hitier, by August 1939 had been executed by England, France, Estonia and Latvia. The list can be continued. And the first country to do it was, in fact, Poland. In 1934 she signed a non-aggression treaty with the German Chancellor, Adolf Hitler. So, while Poland was the first to sign such a treaty, the USSR is the last one on the list. Therefore, there was nothing special in signing a treaty with Germany. In 1939 it was a nation recognised by the global community and at its head was one of its leading politicians. By conclusion,the USSR had the full moral and judicial right to sign a non-aggression treaty with Germany.
Myth Two: there were 'secret protocols' to the treaty signed between Moscow and Berlin. Firstly, having secret articles or secret treaties is a common diplomatic practice of any era. They have been signed by lawful monarchs and presidents and not only by villains and dictators. For example, the treaty between Russia and France of 1894 signed by Emperor Alexander III and the French president was completely secret. Russian tsars and French presidents knew its contents but the French Parliament was not familiar with its articles. The agreement of 1905 between the USA and Japan was just as secret. The two countries divided spheres of influence in Asia based on the results of the Russo-Japanese war. Japan abandoned its aggressive intentions concerning the Philippines, while the States recognised the right of the Japanese to append Korea.[102]
Secondly, it was not only Russia and Germany but also other countries that had secret protocols within their treaties in 1939. For example, the guarantees given to Poland by Britain in April that year were also accompanied by a secret protocol.[103] German treaties with Estonia and Lithuania also contained a secret article. According to this article, the Baltic states were 'to take all military security measures against Soviet Russia as agreed with Germany and in compliance with its advice'.[104]
Thirdly, there is still no convincing evidence that the secret protocols within the non-aggression pact with Germany existed at all. The USSR recognised that they had existed at the Second Congress of People's Deputies[105] after a report made by a commission headed by the foreman of perestroika, Alexander Yakovlev. The thing is that neither in Russian archives nor anywhere abroad can one find the originals of these notorious secret protocols;[106] only copies of copies' were presented. But Gorbachev and his subordinates had already taken a firm tack in the direction of destroying the country. Destroying the country's history blackening and rigging its past are major elements of destroying a country. Therefore, it is hardly surprising that despite lacking the originals, the commission found it 'possible to admit that the secret protocol of 23rd August, 1939 had existed'.[107]
The conclusion is that the very existence of the protocols has not been proved. But even if they had indeed been signed, this was a regular political and diplomatic phenomenon.
The Soviet Union is not to blame for starting the Second World War. If we wanted to blame someone, that would be the Government of Germany, as well as the British and US governments that had been investing enormous amounts of money in German industry for six years. Here we should make a little remark. Adolf Hitler was put in charge of Germany by London and Washington: in other words, by the owners of the 'printing machine'.[108] His task was to start a war against the USSR and to conquer vast territories and vast treasuries full of natural resources as well as to eliminate a dangerous alternative plan of economic development. For this Germany was promised to be made an equal partner of the Anglo-Saxons at the global table. To enable Hitler to fulfil this task, enormous amounts of money were invested in Germany and she was supplied with the latest industrial equipment. The West was afraid and did not notice the militarisation of Germany, which in just six years (1933-1939) created an army from scratch and equipped it with latest systems. Austria and the Czech Republic were surrendered to Hitler to create a big army, and these two countries would provide millions of conscripts and the huge Czech Skoda military plant.[109] Even Poland was Hitler's loyal ally and was preparing a joint attack against Russia.
And when the time had come to realise the plans, Hitler started his game. Instead of building up a conflict with the USSR around the Ukraine, he resolved it.[110] The situation was as follows: having acquired everything he could have possibly acquired from the West, Hitler deviated from the prepared scenario, according to which a war was bound to begin in 1939. It was not without reason that the American magazine Time called Hitler 'Man of the Year' in 1938.
Then London decided to alter the strategy slightly. The English knew perfectly well that Hitler was going to attack Poland. And they were not trying to prevent this attack. The idea was different: having defeated the Polish, the German army would have turned up at the Soviet borders. The tensions between the two countries and the mutual propaganda between the communists and the Nazis were to guarantee that a war between the USSR and Germany would definitely break out. To make it work out it was necessary to:
● promise support to Poland, so that it becomes uncompromising, and never provide any;
● promise Hitler that there would be no support for Poland and he would be 'granted a pardon if he starts a war against the Russians;
● play games with the Russians and linger with negotiations until Germany attacks Poland.
These are the three points on which English diplomacy placed emphasis throughout spring and summer 1939. There was also a fourth task: to keep an eye on the Russians and Germans to prevent them from making any deals. Therefore, each time Berlin and Moscow resumed their relations, the British immediately became more active…
And now let us move on to the story of the signing of the non-aggression pact itself between Germany and the USSR. There are some fascinating details that do not get spoken about aloud very often, if at all. These tiny details can tell us much more about that period and its tensions than numerous thick books. To begin with, I will give you an irrefutable historical fact: it was not Stalin but Hitler who initiated the warm-up of German-Soviet relations. As early as 22nd December, 1938 the trade mission of the USSR in Berlin received a proposition to draw up an agreement. After some probing and 'exchange of opinions', contact ceased. As this book is not on the history of diplomacy, we can omit several months and proceed straight to the climax.
On 2nd August, 1939 the envoy of the USSR, Astakhov, was summoned by the head of the German Foreign Ministry, Joachim von Ribbentrop. The essence of his words was that there were no problems between Berlin and Moscow that could not be solved.
On 5th August, 1939 British and French delegations set off for Moscow to participate in negotiations. The English are not in a particular hurry. They do not go by air… but by sea. And not by a military fast ship but by a low-speed steamer, City of Exeter. As a result, instead of several hours, getting to Moscow takes seven days (on 10th August, 1939 the allied delegation arrives in Leningrad).
On 11th August, 1939 Hitler summons the League of Nations High Commissioner, Carl Burckhardt and asks him for a 'favour': to help explain to the West that everything that Hitler was doing was aimed against Russia. And if this were to fall on deaf ears then he would have to come to terms with Russians.
On 12th August, 1939 the first official meeting of the British, French and Soviet missions took place. Immediately it turned out that the head of the British delegation, Admiral Drax, did not have any letter of authority. The head of the French delegation, General Doumenc, was only authorised to reach an agreement and not to sign any resulting documents. When asked by the head of the Soviet delegation, Voroshilov, whether Poland and Romania would let the Soviet troops into their territory in order to fight against the German aggressors should they annexe these countries, they did not produce any definite answer. This is the very lingering that has been mentioned above. The English did not need to hold on and sit in session for too long: only two weeks were left until Hitler's planned attack against Poland.
On 15th August, 1939 at a meeting with Molotov, the German ambassador, Schulenburg, read out a note which essentially said that it was 'possible to restore good mutually beneficial cooperation' between the two countries and raised a question regarding the arrival of a high German official in Moscow. Incidentally, he was not authorised to give the note to the Russians so that no evidence would be left behind.[111]
The fact that Hitler had planned an attack against Poland for the 26th August, 1939 was known not only in London but also in Moscow. Therefore, it was decided to buy some time and play on the Germans' nerves. At the same time, this would let them find out how serious their intentions were. So, having had a lovely chat with the German ambassador and having realised that the Germans were under time constraints, Molotov said that there was no rush with the visit, ensuring they did not end up just having talks in Moscow without making any particular decisions.
On 17th August, 1939 Schulenburg saw Molotov again. The head of the soviet Foreign Ministry said that Moscow understood why Germany would really want to improve its relations with the USSR. But then a list of previous offences followed. Yet, 'since now the German government has decided to change their policy', it should prove that its intentions are serious and execute economic contracts. That would mean giving the USSR a loan of 200 million marks for seven years and supply quality equipment for this amount. This contract would come first and then it would be possible to discuss a non-aggression treaty.[112]
On 19th August, 1939 Hitler and Ribbentrop sent Schulenburg to Moscow again. He passes a proposition to sign a treaty which would consist of two provisions:
Germany and the USSR shall not under any conditions resort to the use of violence against each other. The proposed duration of the treaty was 25 years.
As an addition Germany was to use its influence to help improve the relations between Moscow and Tokyo. The last provision was crucial. It meant that signing the treaty with Germany would also solve the USSR's second problem, that being the constant aggression from Japan. This was a very serious argument. Incited by Great Britain and the USA, Japan invaded China back in the thirties[113] and started gradually biting off bits of Chinese land approaching the Russian borders. According to the English plan, the USSR was going to be attacked by Japan in the east and Germany in the west. This was to be a two-front war for the USSR, not for Germany. And the first front had already been opened. On 11th May, 1939 a regular Japanese army attacked the Mongolian frontier posts.
When the German ambassador proposed to Stalin the signing of the non-aggression pact, Tokyo was considered to be Berlin's ally. Meanwhile, heavy fighting was talking place at the Khalkhyn Gol River in Mongolia. The Japanese planned an offensive operation on 24th August, 1939. Instead, it was the Red Army that started an offensive on 20th August, 1939, that is to say on the day after the Germans offered their mediation in reconciliation with Japan. To make the Japanese more willing to negotiate it was necessary to beat them up well first.
To assess the actions undertaken by the Soviet officials properly, one needs to realise that the negotiations with the Germans and the battles with the Japanese were happening at the same time. And Berlin did not just offer its friendship: the Germans could actually persuade the Japanese to put an end to the conflict. Pursuing a war against Russia on its own was an extremely difficult task for Japan, if at all feasible.[114] And a non-aggression treaty between Berlin and Moscow would be a perfect excuse for Tokyo to stop fighting. It would be only natural to ask the following question at this point: was there a different way to influence Japan? No, because it would have required a will to stop the war between the USSR and Japan, and this is exactly what was lacking. The situation was, in fact, quite the opposite: the English were trying to organise a rebellion in the Chinese province of Xinjiang.[115] Why did the British need that? Because it was through that province that the USSR supplied support to China and Russian weapons and counsellors helped to strengthen China, thereby weakening the Japanese troops which confronted the Red Army. By blocking the route by which Russian weapons and equipment were supplied, the English were sabotaging the fight of the Chinese and strengthening the Japanese, helping them to aggravate the conflict with Russia…
Credit where credit is due. Stalin did realise how serious Germany's intentions were and did understand why they were in such a hurry. Therefore, despite the problems with the Japanese, he decided to take advantage of the situation with as much profit for the USSR as possible. The Germans asked to meet a minister in Moscow. The English sent someone with no particular position or authority. The situation was very telling…
During his visit to Moscow, the German ambassador, Schulenburg, received quite a specific response from Molotov: provided that the economic agreements were signed on the same day, 19th August, Ribbentrop could come a week later, on 26th or 27th August. When it was suggested that Ribbentrop could arrive earlier, Molotov objected that it was too early to speak of that before the first stage, that is the economic negotiations, had been accomplished. It was about 3 p.m., 19th August, 1939.[116] The officials in Berlin were panicking: time was running out very fast. The Russians were being polite but did not cast any light upon the situation. And all of a sudden they said that without a loan of 200 million marks there could be no progress in the relations. What was Berlin to do? Did Hitler want to credit Stalin? Of course not. He needed money himself to finance his preparations for a war with Poland. But he had no choice. Stalin used the good old Anglo-Saxon trick in the negotiations: having created a problem, he was 'selling' ways to solve it. Today, the USA funds international terrorism and then fights it.[117] The Kremlin lingered and then suddenly offered to speed up the negotiations through financing the USSR until 1946. And to achieve a positive result, the USSR used a carrot after using a stick. Half an hour after saying that Ribbentrop could come a week later, the German ambassador was summoned to Molotov again.
He was presented with the Soviet project of the non-aggression treaty drafted in compliance with all the rules. This is the version that was signed later on with insignificant amendments. This was an ordinary treaty; there was nothing special about it except for one detail: the draft did not specify that the document would lose become null and void should one of the parties attack a third party.[118] Let us just keep this fact in mind and proceed. This piece of information will be very useful later.
On 20th August (at 2 a. m.) a trade and credit agreement was urgently signed. The USSR was to receive a loan of 200 million marks that the country could spend on German equipment and pay back with raw material and food.[119]
So, Germany did what the Kremlin had been asking for: the economic agreement was signed. Hitler, completely exhausted, went to bed at seven in the morning on 20th August. But there was still no clarity from the Russians and the only date proposed by them for the arrival of the German delegation remained the same: 26-27th August, 1939. This was too late for Berlin. And then Hitler decided to speed things up. On 20th August, 1939 he sat down and wrote a personal letter to Stalin. They had never been in correspondence or spoken before. But Hitler had no time to act according to the official procedures: the attack against Poland was planned for 26th August and there was no time to spare. 'Nevertheless, I repeat my proposition to accept my Foreign minister on 22nd August or 23rd August at the latest'[120], said Hitler in his letter. On 21 August, 1939 at 15:00 the German ambassador, Count Schulenburg, presented Hitler's letter in Moscow. Just two hours later, at 17:00, Vyacheslav Molotov gave the German ambassador the response of the head of the USSR.[121] Stalin replied practically immediately.
'21st August, 1939.