Chapters 1-8



1. Those published to date as books or articles include, in addition to the present volume and several preliminary studies by Mr. Staley which have appeared in journals: Frederick L. Schuman, War and Diplomacy in the French Republic, New York, 1931; Harold D. Lasswell, World Politics and Personal Insecurity, New York, 1935; Hazel C. Benjamin, "Official Propaganda and the French Press during the Franco-Prussian War," Journal of Modern History, June, 1932; James T. Russell and Quincy Wright, "National Attitudes in the Far Eastern Controversy," American Political Science Review, August, 1933; Philip Davidson, "Whig Propagandists of the American Revolution," American Historical Review, April, 1934; Schuyler Foster, "How America Became Belligerent; a Quantitative Study of War News, 1914-17," American Journal of Sociology, January, 1935.


Chapter One

1. Cf. C. K. Hobson, The Export of Capital (London, 1914), p. 80.

2. British investments in the United States are drastically understated in this chart. See Appendix A.

3. The estimates of foreign investment used here are given in Appendix A. Population data from Statistical Yearbook of the League of Nations, 1930-31, pp. 18-25.

4. Sources: Herbert Feis, Europe, The Worlds Banker.. 1870-1914 (New Haven, 1930), pp. 157, 78, 27; Thomas W. Lamont, "Foreign Government Bonds," Annals of American Academy of Political and Social Science, 88 (March, 1920), 121-9; U. S. Dept. of Commerce, Bureau of Foreign and Domestic Commerce, "A New Estimate of American Investments Abroad," Trade Information Bulletin No. 767, (Washington, 1931).

5. E. Minost, Le Fédéralisme Economique et les Sociétés à Charte Internationale (Paris, 1929), pp. 91-94. In 1933 the CIDNA, as it is called, was reorganized as a subsidiary of Air France.

6. U. S. Department of Commerce, Bureau of Foreign and Domestic Commerce, "A New Estimate of American Investments Abroad," Trade Information Bulletin No. 767 (Washington: 1931), p. 8.

7. C. F. Remer, Foreign Investments in China (New York, 1933), pp. 68, 86.

8. The estimates of foreign long-term capital within each country which appear in Appendix A (and, in Part, in Chart VI of this chapter) were used, together with dollar values of imports plus exports as reported in the Statistical Yearbook of the League of Nations, 1930-31, pp. 172-3.

9. In the Statist, Supplement, February 14, 1914.


Chapter Two

1. The description of recent events in this brief sketch relies on current newspaper reports, mainly those of the New York Times. For a chronology of reparations and German debts, see William O. Scroggs, "German Debts and Export Bounties," Foreign Affairs, 17 (April, 1934), pp. 520-3.

2. Wirtschaft und Statistik, published by the Reich Statistical Office, Vol. 10 (November, 1930), pp. 891-2. Reichsmark figures have been converted into dollars at $0.238 to the mark.

3. Ibid.

4. The story as here presented is condensed, with permission of the editors, from my article, "Business and Politics in the Persian Gulf: The Story of the Wönckhaus Firm," Political Science Quarterly, 48 (September, 1933), 367-85.

5. In its Peace Conference Handbook on the Persian Gulf.

6. See the article cited above for additional details and full citations.

7. Personal interview with Mr. Wönckhaus, Hamburg, 1931. He was good enough afterward to read over and correct a typewritten memorandum of the long conversation. His statements have been checked against documents wherever possible, and in every case found accurate; my judgment is that his story deserves full credence.

8. This notion found expression in such serious historical writings as Sir Percy Sykes' A History of Persia (2d ed., 1921, Vol. II, pp. 431-33). The Times History of the War, published by the London Times while hostilities were in progress, contains a chapter which goes into the history of the Persian Gulf in considerable detail and devotes much attention to the activities of the Wönckhaus firm. Its value as unbiased historical narrative is, of course, nil, for it suffers from the distortion common to war-time propaganda, but it was evidently written by a very well-informed person and is not unindicative of the views held by colonial zealots before and during the war. It attributes to the Germans deep-laid plans to upset the British Position in the Gulf and then interprets everything in that light. The more trivial or innocent the German activities, therefore, the more insidious. Thus, Germany "quietly established a vice-consulate at Bushire." Wönckhaus and his agents "talked of commerce, but they surreptitiously sought at various points to obtain a territorial footing." The Wönckhaus firm rapidly blossomed into a large and widespread enterprise, established headquarters at Bahrein and opened a new branch at Basra. "The whole Gulf wondered where the money came from. It certainly was never obtained from profits." The "vigilance of the British representatives on the spot foiled the German efforts at every turn."

9. At Hamburg in 1901 the Kaiser alluded in a public speech to the rôle which Hansa traders might play in expanding the Empire. "As head of the Empire, I rejoice at the departure of each new Hanseate ... who goes out to foreign parts, looking with his keen, unbiased eye for new points where we may hammer in a nail on which to hang our armor." (Klaussmann, The Kaiser's Speeches, transl. Schierbrand (New York, 1903), p. 252). Living in the Persian Gulf among foreigners of many nationalities, says Mr. Wönckhaus, he was in a good position to observe the effect of such speeches upon the outside world. They did much damage and multiplied the difficulties of German merchants. A similar effect resulted from the writings of bombastic nationalists like Rohrbach, whom Mr. Wönckhaus denominates "charlatans" and "troublemakers."

10. See the article cited above for details.

11. Personal interview with Sir Percy Cox in London, 1931.

12. Interview with Mr. Wönckhaus, At the India Office in London (which handles the political affairs of the Persian Gulf) I was informed that the papers on the Abu Musa affair cannot be made available, but an official very kindly volunteered to look them through and to answer what questions he could without violating official discretion. His impression from a reading of the documents was that Germany had done everything proper in pushing the claim and had not been at all soft about it. Some sort of a compromise seems to have been reached just before the war, Mr. Wönckhaus claiming he ought to have compensation at least for the iron oxide he had already mined and lost. The official who looked at the documents agreed that to accept the version given by Mr. Wönckhaus and used above in the text "would not be far off the mark." The Abu Musa affair is not mentioned in the collection of British Documents on the Origins of the War nor in Die Grosse Politik.

13. Lt. Col. Sir Arnold T. Wilson, Loyalties, Mesopotamia 1914-1917, A Personal and Historical Record (Oxford University Press, 1930), pp. 74 ff.


Chapter Three

1. F. C. Howe, in Annals of American Academy of Political and Social Science, LXVIII (November, 1916), 318.

2. H. N. Brailsford, The War of Steel and Gold (London, 9th edn., 1917), pp. 51-2. Harold J. Laski, "The Economic Foundations of Peace," in The Intelligent Man's Way to Prevent War (ed., Leonard Woolf, London, 1933), pp. 507-8, says: "The Russo-Japanese War was, in the last analysis, the outcome of an endeavour by a corrupt Government to defend the immense timber concessions in Manchuria of a little band of dubious courtiers."

3. I rely in what follows mainly upon William L. Langer's scholarly investigation into the origins of the Russo-Japanese War, published in German in Europäische Gespräche (Hamburg), IV (June, 1926), pp. 279-322. My account is based on the original English manuscript, which I had the privilege of consulting.

4. Bezobrazoff is said to have led an adventurous life in Siberia after his retirement from the Guards. Izvolsky described him as "un personnage burlesque et à moitié fou" who won such an influence over the Tsar that he and his clique shortly had not only the direction of the politico-economic enterprise on the Yalu but the whole conduct of diplomatic relations with Japan in their hands. O. Franke, Die Grossmächte in Ostasien (Hamburg, 1923), p. 223.

5. Cf. the discussion of chartered companies in Ch. 11.

6. Langer, op. cit., pp. 290-91, in the Europäische Gespräche. For documentation the reader is referred directly to this article.

7. Langer, op. cit., p. 304.

8. In addition to Langer, op. cit., see on this point O. Franke, Die Grossmächte in Ostasien (Hamburg, 1923), pp. 216-24, and A. J. Brown, The Mastery of the Far East (New York, 1919), pp. 142-46.

9. "The late Italian war had its motive, in a large part at least, in the speculations of the Bank of Rome." (David Starr Jordan, "Interlocking Directorates of War," World's Work, XXVI (July, 1913), 277. "It is certain. that private interests, often of doubtful value, pushed Italy into seizing Tripoli. The rôle of the Bank of Rome should be particularly mentioned.... This bank established a navigation line between Italy and Tripoli, organized certain local industries; especially, it bought the best lands throughout the country. It desired the conquest in order to make a better profit on its establishments and in its various acquisitions." (Félicien Challaye in Revue du Mois, XIV [Nov. 10, 1912], p. 637.)

10. Francesco Crispi, Memoirs (London, 1914), II, 474, 450.

11. See A. F. Pribram, The Secret Treaties of Austria-Hungary (ed. A. C. Coolidge, 1920), I, 95, 110, 117, 240; II, 232; Siebert and Schreiner, Entente Diplomacy and the World, 1909-1914 (New York, 1922), pp. 142 ff. These are summarized in P. T. Moon, Imperialism and World Politics (New York, 1927), p. 219.

12. ". . . Italy does watch over Tripoli with covetous eyes, but, nevertheless, Italian statesmen look forward with worry to the moment when the pressure of circumstances will convince them that they must lay their hands on Tripoli." (Die Grosse Politik, No. 5834, Dec. 12, 1901.)

The Italian foreign minister said, "Tripoli, as the last still unappropriated remainder of the Mediterranean coast, must some day become Italian." (Ibid., No. 5843, Dec. 27, 1901.)

"That Tripoli will some day fall to Italy is not only taken for granted here, but is regarded as nothing less than a vital question, and that by all parties with the exception of a part of the extreme left." (Ibid., No. 5848, Jan. 10, 1902.)

13. In December, 1901, the German ambassador and the Italian foreign minister discussed whether or not possession of Tripoli might be obtained by a peaceful understanding with the Sultan, thus avoiding the dangerous method of annexation by force. Foreign Minister Prinetti assured the envoy that Italian ambitions, which worried its ally, "would be fully satisfied with the acquisition of Tripoli, in whatever form." Von Bülow, in Berlin, noted on the dispatch: "For a while---yes." (Die Grosse Politik, No. 5843.)

14. Italy's Foreign and Colonial Policy. A selection from speeches of Senator Tommaso Tittoni, during his term of office as Foreign Affairs Minister (1903-1909). Eng. Transl. (London, 1914), pp. 20-26.

15. Report of the Banco di Roma, 1905.

16. Here I rely upon an article by René Pinon, " L'Europe et la guerre Italo-Turque," in the Revue des deux mondes, June 1, 1912, pp. 608 ff. The article shows evidence of well-informed authorship, but I have been unable to check its story about the Banco di Roma against independent sources. Pinon does not say how he got his information.

17. "The Banco di Roma ... with a large capital of Vatican and Clerical money, professes that its aim is to further Italian commerce with the East, and for this reason, no less than for patriotic reasons---for the directors avow that they are none the less patriots because they are strict Catholics---decided to establish a branch bank in Tripoli." This in Charles Lapworth, Tripoli and Young Italy (London, 1912), p. 67, a book which reads like propaganda in justification of Italy's action and which mentions many interviews with Italian officials in the preface, tends to confirm the story given by Pinon about the bank's rôle.

18. "La Tripolitaine à la Veille de l'Occupation Italienne," an article in the French colonial organ, L'Afrique Française, 1911, pp. 362 ff., based on first-hand information obtained from Italian government and bank officials.

19. Ibid.

20. Op. cit.

21. Jacob Viner, "Political Aspects of International Finance, II," Journal of Business of the University of Chicago, I (July, 1928), p. 341. I am indebted to this article for calling attention to the interesting aspects of the Tripoli case.

22. Pinon, op. cit., p. 609. The financial bulletin of Le Temps (Paris) recorded on September 23, 1912, that Banco di Roma securities enjoyed a very active market. "It is known that this bank should profit particularly by the conclusion of the peace on account of the vast terrains which it has acquired in Tripoli and which it will now commence to exploit."

23. The moment when France became lord of Morocco was the signal for Italy to proceed in Tripoli." (Die Grosse Politik, German ambassador in Rome to his foreign office, Sept. 28, 1911, No. 10,841.)

24. Pinon, op. cit.

25. "By way of working up public opinion in favour of war, there have been seven Italian newspaper correspondents in Tripoli since spring (1911) for whose idle hands the devil sure much mischief found to do. These industrious pressmen, having nothing serious to report, magnified every trifle and inflamed every dispute. Their note was that if Italian concession-hunters did not immediately receive every concession they asked for, and that at their own terms, the Turks were thwarting Italian enterprise. If it was not the Turks it was Germany, or France. It is almost incredible the morbid suspiciousness which was thus developed in the Italian Press. There are hardly any Germans in Tripoli, but there are a few, who are on the look-out for business there as elsewhere. One of them got a contract for lighting the streets of Tripoli with acetylene lamps. Forthwith the Tribuna denounced 'the German invasion.' The Germans wanted to put up a hotel. The Italian colony opposed it as if the hotel had been a fortress.... The French got a contract to improve the harbour of Tripoli. The Italians made such angry protests the contract had to be cancelled.... The Italians, having earmarked the whole of Tripoli and Cyrenaica as their own, regarded every foreign merchant or explorer as a potential enemy." (W. T. Stead, Tripoli and the Treaties [London, 19111, pp. 42-43 .)

26. Cited in L'Afrique Française, 1911, p. 362. Propaganda of this sort, emanating from the colonialists and nationalists, with which the bank had cast its lot, and probably from government officials who desired to prepare public opinion after the decisive step was decided upon, created an utterly fantastic myth in Italy regarding the wealth of Tripoli. The truth was that, as a land for Italian colonization, Tripoli was useless. It offered agricultural prospects of the poorest sort. Its mineral wealth, about which exaggerated dreams were rife in Italy, was problematical or nonexistent. Administration of the Arab tribesmen was bound to be a difficult and costly task. The British journalist, W. T. Stead, was probably right when he estimated that profits which might arise from an exclusive monopoly of the trade of Tripoli would not yield one per cent on the cost of the war---said to have been over $200,000,000. See P. T. Moon, op. cit., p. 222, for data on the economic costliness to Italy of its colony.

27. Die Grosse Politik, Nos. 10,813, 10,815.

28. Giovanni Giolitti, Memoirs (London, 1923), p. 205; Pinon, op. cit., p. 609.

29. Giolitti, op. cit., p. 228.

30. Carlo Schanzer, "Italian Colonial Policy in Northern Africa," Foreign Affairs (New York), Vol. 2, March, 1924, p. 446.


Chapter Four

1. Annals of the American Academy of Political and Social Science, 68 (November, 1916), pp. 298-3 11, "The Relation of Government to Foreign Investment."

2. Dr. Delbrück, Secretary of the Interior, Reichstag debate of February 11, 1911, in Verhandlungen des Reichstags, Stenographische Berichte, Vol. 264, p. 4555.

3. Quoted by two speakers in the same Reichstag debate (Ibid., pp. 4554, 4560) from a book by Dr. Jacob Riesser, president of the Hansabund, translated as The German Great Banks and Their Concentration.... (U. S. National Monetary Commission, 1911.)

4. "If we send our savings to the United States, to the French and English colonies, we simply strengthen a political and economic opposition; the more we invest, on the other hand, in our Chinese sphere of influence, in our colonies, in Central and South America, in southeastern Europe and in Asia Minor, the more effectively do we lay the foundation for a greater Germany, not in the political, but indeed in the national-economic sense." (Sartorius von Waltershausen, Das Volkswirtschaftlicht System der Kapitalanlage im Auslande [Berlin, 1907], p. 132.)

"We may say with assurance that Germany has no use for certain kinds of foreign securities, namely for all those which merely occupy the capital and which offer no opportunities to win economic and political advantages for Germany; such securities take away the place of useful foreign and domestic issues." (Dernberg, Kapital und Staatsaufsicht [Berlin, 1911], p. 18.)

5. Mr. Huntington Wilson argued, in the paper cited above, that to merit the strongest governmental support the foreign investment must be "really beneficial to the nation," which would not be the case "if the investment diverted from channels of real national advantage money that might otherwise serve that advantage either abroad or at home."

6. Interviews with officials.

7. A. H. Gibson and A. W. Kirkaldy, British Finance during and after the War (London, 1921), pp. 183 ff.

8. Admiral Alfred von Tirpitz, My Memoirs (transl. New York, 1919), Ch. 8.

9. Sir Percy Sykes, History of Persia (2d edn., London, 1921), II, 533-4.

10. Senate Journal, 62nd Congress, 2nd Session, p. 511.

11. Winston S. Churchill, The World Crisis (N. Y., 1923), I, 133-41, 179-81. "Oil is the very soul of future sea fighting. Hence my interest in it... my consuming passion for oil. . .," wrote Lord Fisher. (Records [London, 1919], p. 194.)

12. Cf. the brilliant little book by R. G. Hawtrey, Economic Aspects of Sovereignty (London, 1930), Ch. IV on "Economic Power."

13. A representative of Bismarck in the debate spoke of the "disadvantageous reaction upon the prestige and the influence of Germany in that part of the earth, and far beyond its limits" which the fall of the Godeffroy house would have. "All the tedious negotiations which have been so carefully carried on and all the agreements secured for the benefit of our countrymen in the South Sea will seem a striking contrast to the light relinquishment of the most important material basis of the rights we have won there." (Alfred Zimmermann, Geschichte der Deutschen Kolonialpolitik [Berlin, 1914), pp. 17-19.) See an account of the Samoan case in Chapter 5.

14. The French Ministry of Foreign Affairs, for example, maintains a section which encourages an acquaintance in the outside world with French art and literature and language. It grants scholarships, contributes funds to assist in maintaining student houses where French is spoken at foreign universities, and confers decorations on persons abroad who have helped to promote cultural relations with France. See Frederick L. Schuman, War and Diplomacy in the French Republic (N. Y., 1931), pp. 36-7.

15. Von Tirpitz, op. cit., p. 111.

16.The navy was willing to go further than the foreign office in this respect. Von Schoen, Erlebtes (Stuttgart, 1921), pp. 63-4.

17. Karl Helfferich, Georg von Siemens (Berlin, 2d edn., 1923), III, 40-1.

18. Francesco Crispi, Memoirs (London, 1914), pp. 82-3.

19. Herbert Feis, Europe the World's Banker: 1870-1914 (New Haven, 1930), pp. 369-372, in which German, British, and Russian diplomatic documents on the matter are summarized and cited.

20. British and Foreign State Papers, 1906-1907, Vol. 100, pp. 555-6.

21. Die Grosse Politik, XV, 81-3, Nos. 4177-8

22. "Den letzten beissen die Hunde!" Stenographische Berichte über die Verhandlungen des Reichstags, 1897-8, III, 1987

23. M. J. Bau, The Foreign Relations of China (New York, 1921), pp. 38-9.

24. Text of the agreement in John V. A. MacMurray, Treaties and Agreements with and Concerning China (New York, 1921), I, 266. See also Great Britain, China No. 1 (1899), p. 211.

25. MacMurray, op. cit. 1 74 ff.; W. W. Willoughby, Foreign Rights and Interests in China (Baltimore, 1927), p. 157.

26. F. W. Overlach, Foreign Financial Control in China (New York, 1919), pp. 168-9.

27. North Manchuria and the Chinese Eastern Railway, Harbin, 1924, pp. 398-400 (Published by the Railway.)

28. P. H. B. Kent, Railway Enterprise in China (London, 1907), p. 93. Quoted with approval by Overlach, op. cit., p. 130.

29. André Tardieu, Le Mystère d'Agadir (Paris, 1912), p. 82.

30. Willoughby, op. cit., pp. 308-10.

31. Mahmoud Afschar, La Politique Européenne en Perse (Lausanne doctoral thesis, Berlin, 1921), pp. 95 ff; Helfferich, op. cit., I, 86-7-

32. The above account is based on the researches of Feis, op. cit., pp. 247-257. The quotations from Prince K. H. Lichnowsky are found in his book, Heading for the Abyss (New York, 1928), pp. 274-5, 312.

33. Feis, op. cit., p. 153.

34. Sir Percy Sykes, History of Persia, II, 424-5; Wm. Morgan Shuster, The Strangling of Persia (N. Y., 1912), Chs. V, VI.

35. Salisbury was referring to Britain's moral influence over Egypt. "In this we are still supreme," he continued, "and have many modes of applying it---diplomatic notes, consular interviews, newspapers, blue books. We must devote ourselves to the perfecting of this weapon." (A private letter to Lyons, July 15, 1879, in Lord Newton, Lord Lyons: A Record of British Diplomacy [London, 1913], II, 188.

36. R. L. Buell, "The American Occupation of Haiti," Foreign Policy Association Information Service, Vol. V, Nos. 19-20, Nov. 27-Dec. 12, 1929, p. 334.

37. Interview with Mr. F. M. Huntington Wilson, Assistant Secretary of State under Knox, who wrote in the Annals article cited at the first of this chapter: "In the encouragement of foreign enterprise, diplomacy must beware of forcing it into spheres where vexations conflict with the special spheres of influence and interest of other countries outweighs all commercial gain to be looked for. Every great power has some 'doctrines' that it conceives to be as vital to it as the Monroe Doctrine is considered here. Korea and Manchuria, Persia and Siam, come to mind as examples of territory where, while conducting ordinary trade, we should be wasting our energies to attempt intensive developments. In return we should gradually crowd out from our own sphere of special interest foreign interests wherever they are predominant to an uncomfortable extent and quite beyond the requirements of an ordinary trade outside the spheres of special interest of the foreign governments concerned."

38. See Wilhelm Bitter, Die Wirtschaftliche Eroberung Mittel-Amerikas durch den Bananen-Trust (Hamburgische Forschungen, Vol. 9. Braunschweig, 1921), pp. 68-9.

39. See Chapter 9.

40. See Professor Jacob Viner's study, "International Finance and Balance of Power Diplomacy, 1880-1914," Southwestern Political and Social Science Quarterly, IX, March, 1929, pp. 1-45, which examines a number of other cases as well as those of Russia and Italy. In none of the others is it apparent that non-governmental placements had a part.

41. Feis, op. cit., pp. 222-23. "For example, in March, 1914, the Russian metallurgical factories, Poutiloff, wanted to increase their capital, and gave an option to a Russian private bank, in which Krupp possessed an interest. The French Government caused this arrangement to be set aside and induced Creusot to enter negotiations to supply the capital." . . . "The metallurgical works were dependent upon the Russian Government for armament and railroad equipment orders, and were in intimate relations with both governments. L'Union Parisienne, the Paris bank which took the lead in financing this industrial development, had close connection with Schneider and Company (French armament interests) and with them began in 1912 to work out a general plan to participate in the munitions and materials orders for the Russian army and navy.' The French Government encouraged this process of investment and occasionally took measures to advance it."

42. Viner, op. cit., p. 13.

43. Albert Billot, La France et l'Italie; histoire des années troubles 1881-1899 (Paris, 1905), I, 143-6.

44. Viner, op. cit., p. 15; Crispi, op. cit., II, 294, III, 217; Helfferich, op. cit., II 206-18.

45. Die Disconto-Geselischaft 1851 bis 1901. Denkschrift zum 50 Jährigen Jubiläum (Berlin, 1901), p. 216.

46. Feis, op. cit., pp. 239, 241-2

47. These experiences are discussed in some detail in another connection. See Chapter 18.

48. Tyler Dennett, Americans in Eastern Asia (New York, 1922), p. 504.

49. By Russia against Germany in 1912, in an effort to have Austria-Hungary restrained on Balkan issues. Karl Helfferich, Der Weltkrieg (Berlin, 1919), I, 103.

50. The evidence at the basis of these conclusions is not presented here because short-term placements lie outside the scope of this book.

51. Tyler Dennett, John Hay (N. Y., 1933), pp. 401-2. Henry Pringle, Theodore Roosevelt (N. Y., 1931), pp. 388-9.

52. AIfred Rambaud, Jules Ferry (Paris, 1903), pp. 390, 393; cited in J. Viner, "Political Aspects of International Finance II," Journal of Business of the University of Chicago, I (July, 1928), p. 350

53. Reproduced from an article in the Kölnische Zeitung of August 4, 1881, in a pamphlet by Hübbe-Schleiden, published in Hamburg, 1906.

54. Speech before the Reichstag in 1885, quoted in M. E. Townsend , The Rise and Fall of Germany's Colonial Empire, 1884-1918 (New York, 1930), p. 120.

55. Townsend, op. cit., pp. 73-5

56. New York Times, May 8, 1925, p. 18, quoted in Charles and Mary Beard, The Rise of American Civilization (N. Y., 1927), II, 705.

57. Kaiser Wilhelm II, Ereignisse und Gestalten (Leipzig, 1922), p. 194.

58. Die Seeinteressen des deutschen Reichs, Zusammengestellt auf Veranlassung des Reichs-Marine-Amts, 1898.

Die Entwicklung der deutschen Seeinteressen, Reichs-Marine-Amt, Berlin, 1905.

59. Eckart Kehr, Der Kampf um das erste Flottengesetz (doctoral thesis, University of Berlin, 1929), p. 95.

60. Eckart Kehr, "Soziale und Finanzielle Grundlagen der Tirpitzschen Flottenpropaganda," Die Gesellschaft, 1928, II, p. 219, and the same author's book, Schlachtflottenbau und Parteipolitik: 1894-1901 (Berlin, 1930), pp. 460 ff.

61. Paul von Schwabach, papers and memoranda from his files printed for private circulation under the title Aus meinen Akten (Berlin, 1927), p. 210.

62. Eckart Kehr, Schlachtflottenbau . . ., pp. 240-1.

63. Die Disconto-Gesellschaft: 1851 bis 1901, p. 212; Helfferich, Georg von Siemens, II, 168.

64. The Times Book of Russia (London, 1916), introduction.

65. Quoted in lecture by Julius Landmann, "Ueber Mittel und Grenzen der Bankmässigen Exportförderung," in stenographic record of the first "Schweizerischer Bankiertag," Geneva, October 18, 1913.

66. Gerd Tacke, Kapitalausfuhr und Warenausfuhr; Eine Darstellung ihrer uninittelbaren Verbindung, No. 57, in the series Probleme der Weltwirtschaft Institut für Weltwirtschaft und Seeverkehr, Kiel (Jena, 1933).

67. Ibid., pp. 131-138.

68. These examples and others are documented in J. Viner, "Political Aspects of International Finance, II," Journal of Business of the University of Chicago, I (July, 1928), pp. 353-4

69. Feis, op. cit., pp. 131-2.

70. See the discussion in Charles A. Beard, The Idea of National Interest (New York, 1934), pp. 157-8; also Frank A. Southard, American Industry in Europe (Boston, 1930, passim, and pp. 90 ff.; also American Branch Factories Abroad, Sen. Doc. 258, 71st Cong., 3d Sess. (Washington, 1931).

71. Op. cit., pp. 35-7.

72. Börsen Courier, June 21, 1926; Berliner Tageblatt, June 19, 1926.

73. See Bau, op. cit., pp. 201-3; W. S. Culbertson in Annals of the American Academy of Political and Social Science, March, 1924, pp. 93-4.

74. See Chapter 7.

75. R. L. Buell, The Native Problem in Africa (N. Y., 1928), II, 846 ff. On the Stevenson Plan and other raw materials restrictions see B. H. Williams, Economic Foreign Policy of the United States (New York, 1929), Ch. 19.

76. Ibid., p. 403.


Chapter Five

1. For the framework of this story, and particularly for the American angles of it, I am indebted to a recent study by George Herbert Ryden, The Foreign Policy of the United States in Relation to Samoa (New Haven, 1933). The above paragraph is based on pp. 43-55.

2. Material on the Godeffroy firm and the German angle in Samoa is from Richard Hertz, Das Hamburger Seehandelshaus J. C. Godeffroy und Sohn 1766-1879 (Hamburg, 1922). The above paragraph depends on an official report by H. B. Sterndale, a New Zealander, written in 1874 and quoted by Hertz from H. S. Cooper, The Coral Lands of the Pacific (London, 1882), p. 231.

3. Ryden, op. cit., pp. 76-81.

4. Commander Meade's address to the natives of Tutuila, as reported by himself to the Navy Department, shows what was occupying his mind : "The Government of the United States of America is about to establish commercial relations with the Samoan Islands by means of the line of Steamers now plying between California, Hawaii, New Zealand and Australia, and wishes in its own interest as well as that of its citizens to secure a convenient port in the Samoan Islands to use as a coaling station and resort for its ships of war which are to cruise in the South Seas to protect commerce. I have come to Pago Pago as it is the finest harbor in the islands and the key to Samoa, to survey and examine it for that purpose and to secure from the Chief of Pago Pago such rights and privileges as will prevent other Nations from acting in a way adverse to the interests of American citizens or to your injury as a free people and the rightful owners of the soil." (Quoted in Ryden, op. cit., p. 66.)

5. Ibid., p. 73.

6. Ibid., pp. 83-4.

7. He saw the Polynesian Land Company's agents at work and reported that the San Francisco stockholders were, in his opinion, "innocent and highly respectable gentlemen, whose money has been squandered and their reputation stained by adventurers representing them on the islands." (Ibid., p. 95.)

8.Ibid., Ch. IV.

9. Ryden, op. cit., p. 130.

10. Ibid., pp. 115-16, quoting the contract.

11. Steinberger's efforts to get damages from Great Britain for his imprisonment were assisted by Washington, but without success, for the British government pointed out that the action had been taken at the request of the American consul. Nevertheless, the British naval officer was dismissed from the service. (Ibid., p. 146.)

12. Ryden, op. cit., Ch. VI.

13. The reader will find a fascinating chronicle of exciting times in Samoa and also something of a literary masterpiece in Robert Louis Stevenson's A Footnote to History. Stevenson came to live in Samoa for his health, and out of his first-hand acquaintance with natives and whites his pen has given us inimitable characterizations of the German firm and its managers, of traders, missionaries, speculators, consuls, and the other types that congregate in "backward" countries, and of the bewilderment of the Samoans enmeshed in their own culture, the "civilization" of the missionaries, business rivalry, and great power politics.

14. Ryden, op. cit., p. 199.

15. Ibid., Ch. VIII.

16. Hertz, op. cit., pp. 54-8.

17. Ibid., pp. 59-60, based on foreign office documents.

18. Hertz, op. cit., pp. 60-63.

19. Whitebook, Deutsche Interessen in der Südsee, Reichstagsdrucksache No. 101, April 14, 1880.

20. Alfred Zimmermann, Geschichte der Deutschen Kolonialpolitik (Berlin, 1914), p. 19, and note 21.

21. Ibid., p. 20. See also on the whole affair, Maximilian von Hagen, Bismarck's Kolonialpolitik (Stuttgart, 1923), pp. 70-83.

22. Ryden, op. cit., pp. 277-317.

23. Ibid., Ch. X.

24. Executive Letter Book, Navy Department, October 12, 1888, quoted by Ryden, p. 416.

25. See Robert Louis Stevenson's dramatic account, A Footnote to History.

26. E. Lavisse, La vie politique à l'étranger, 1889, p. 455.

27. Ryden, op. cit., p. 536.

28. Persia and the Persian Question (London, 1892), I, 614.

29. Mahmoud Afschar, La Politique Européenne en Perse (doctoral thesis at Lausanne, published Berlin, 1921), pp. 197 ff.

30. Correspondence between Her Majesty's Government and Baron de Reuter . . British Parliamentary Papers, 1873, LXXV, 803.

31. Afschar, op. cit., p. 200.

32. Sir H. Drummond Wolff, Rambling Recollections (London, 1908), II, 340.

33. Herbert Feis, Europe the World's Banker. 1870-1914 (New Haven, 1930), p. 362.

34. This brief sketch is based mainly on J. Fred Rippy, Latin America in World Politics (New York, 1928), Ch. XI.

35. Rippy, op. cit., p. 192.

36. Largely based on the careful summary of available evidence contained in R. L. Buell, "The American Occupation of Haiti," Foreign Policy Association Information Service, V, Nos. 19-20, November 27-December 12, pp. 334-5.

37. Paul H. Douglas, "The National Railway of Haiti," Nation, January 19, 1927.

38. Based on Benjamin H. Williams, Economic Foreign Policy of the United States (New York, 1929), pp. 34-36.

39. "Inquiry into the Occupation of Haiti and Santo Domingo," a record of the hearings before a select committee of the United States Senate (Washington, 1922), p. 701.

40. Ibid., pp. 191-2, 566, 702.

41. Frederick Sherwood Dunn, The Diplomatic Protection of Americans in Mexico (New York, 1933), pp. 306-8.

42. An authorized interview granted to Samuel G. Blythe on April 27, 1914, quoted, in President Wilson's Foreign Policy, James Brown Scott, ed. (N. Y., 1918), pp. 383-391. Dunn, op. cit., p. 319.

43. Joseph P. Tumulty, Woodrow Wilson as I Know Him (Garden City, 1921), pp. 144-161. Dunn, op. cit., p. 324.

44. For details of the diplomatic controversy see F. S. Dunn, op. cit., Chs. X, XI, XII, and official documents there cited; also J. Reuben Clark, Jr., "The Oil Settlement with Mexico," Foreign Affairs (New York), Vol. 6, July, 1928, pp. 600-614

For discussion of the issues involved see Walter Lippman, "Vested Rights and Nationalism in Latin America " Foreign Affairs, April, 1927, p. 353; E. M. Borchard, "How Far Must We Protect Our Citizens Abroad?" New Republic, April 13, 1927, p. 214; Charles Warren, "What Is Confiscation?" Atlantic Monthly, August, 1927, p. 246; John P. Bullington, "Problems of International Law in the Mexican Constitution of 1917," Am. Journ. of International Law, October, 1927, p. 685. (Cited by Williams, op. cit., p. 163.)


Chapter Six

1. H. J. Whigham, The Persian Problem (London, 1903), p. 316. Italics mine.

2. Edith E. Ware, Business and Politics in the Far East (New Haven, 1932), Ch. II and p. 115.

3. See Chapter 7, the Mannesmann affair.

4. William M. Malloy (compiler), Treaties ... between the United States of America and Other Powers (Washington, 1910), I, 265-6.

5. Lord Newton, Lord Lyons (London, 1913), I, 176.

6. R. Stanley McCordock British Far Eastern Policy, 1894-1900 (New York, 1931), p. 191; China No. 1 (1899), No. 243, p. 166.

7. Foreign Office debate in the House of Commons, July 10, 1914, Parliamentary Debates, House of Commons, 5th ser., LXIV, 1446.

8. Herbert Feis, Europe the World's Banker: 1870-1914 (New Haven, 1930), pp. 97-8, 177.

9. Foreign Relations of the United States, 1897, No. 1376, Secretary Richard Olney to Denby, December 19, 1896.

10. J. B. Moore, .A Digest of International Law (Washington, 1906), IV, 567.

11. Charles A. Beard, The Idea of National Interest (New York, 1934), p. 464.

12. F. A. Ogg, National Progress, 1907-1917 (New York, 1918), p. 263.

13. Foreign Relations of the United States, 1897, pp. 56-8, January 10, 1897. This dispatch was written before receipt of the general instructions quoted above, but after their receipt Denby wrote that he had acted in accordance with those instructions as he understood them. (Ibid, p. 59.)

14. There was also praise for American railroad builders in general and recommendation of these financiers in particular: "that it was conceded by all the officials who had been consulted on railroad questions that Americans could better than any other people build great railroads; ... that a few weeks ago it was understood, that the contract for building the Hankow-Pekin line was actually let to Americans---a preliminary contract had been made with the American China Development Company; that this company was composed of men who were worth several hundred millions of taels; that it was beyond all peradventure able to execute any contract it might make . . ." The State Department took exception to this part of Denby's argument, pointing out that the Development Company was a limited liability concern with a very small capital and that the financial standing of the promoters had little to do with the matter. (Ibid., pp. 59-60.)

15. Die Grosse Politik, No. 3970, January 9, 1893.

l6. Op. cit., No. 3965, January 6, 1893, and footnote.

17. Cf. Quincy Wright, American Journal of International Law, 21 (1927), 761; W. W. Willoughby, Foreign Rights and Interests in China (Baltimore, 1927), pp. 44-5.

18. See Chapter 13.

19. B. H. Williams, Economic Foreign Policy of the United States (New York, 1929), p. 56; Foreign Relations of the United States, 1912, p. 1198. "At another time, when the government of Panama was contemplating the construction of a railway, Colonel Goethals and Minister Price were requested by the Department of State to make recommendations upon the plan. The two agreed that the Department of State should require the bonds for the project to be floated in the United States." See Foreign Relations of the United States, 1914, p. 1030.

20. China, No. 1, 1899, Nos. 175, 286; Willoughby, op. cit., I, 144; T. W. Overlach, Foreign Financial Control in China (New York, 1919), pp. 31-33.

21. Willoughby, op. cit., I, 83-5.

22. Willoughby, op. cit., I, 85-88.

23. Overlach, op. cit., p. 49.

24. Sir Charles Addis, Manager in London of the Hongkong and Shanghai Banking Corporation, "Policy and Finance in China," Far Eastern Review, March, 1920, pp. 162 ff., and a personal interview with Sir Charles Addis.

25. See André Tardieu, Le Mystère d'Agadir (Paris, 1912), pp. 1-2, 29-31, 71-2.

26. Tyler Dennett, Americans in Eastern Asia (New York, 1922), pp. 644-8.

27. M. J. Bau, The Foreign Relations of China (New York, 1921), pp. 162 ff. and M. J. Bau, The Open Door Doctrine in Relation to China (New York, 1923), Ch. VIII.

28. Willoughby, op. cit., Ch- 38.

29. This brief summary is based on B. H. Williams, The Foreign Economic Policy of the United States (New York, 1929), Ch. IV, to which the reader is referred for citations of sources.

30. "Restrictions on American Petroleum Prospectors in Certain Foreign Countries," Sen. Doc. 11, 67th Congress, 1st Session; "Oil Prospecting in Foreign Countries," Sen. Doc. 39, 67th Congress, 1st Session; "Oil Concessions in Foreign Countries," Sen. Doc. 97, 68th Congress, 1st Session; Federal Trade Commission, Report on Foreign Ownership in the Petroleum Industry, Washington, 1923.

31. Pierre l'Espagnol de la Tramerye, The World Struggle for Oil (New York, 1924), p. 40, quoted by B. H. Williams, op. cit., p. 62.

32. Still further negotiations were required until the shares in the Turkish Petroleum Company were finally rearranged as follows: Anglo-Persian, 31.25 per cent; Royal Dutch-Shell, 21.25 per cent; French interests, 21.25 per cent; American interests, 21.25 per cent; an Armenian early interested in the company, 5 per cent.

Williams, op. cit., pp. 62-69; Ludwell Denny, We Fight for Oil (New York, 1928), pp. 151, 156-7.

33. Williams, op. cit., pp. 69-70; State Department Press Release, September 17, 1928.

34. Insurance commissioners of other states joined New York in protests to Berlin, and they may have excluded Prussian companies also. See Foreign Relations of the United States, 1895, pp. 428 ff; 1896, pp. 192 ff; 1897, pp. 204 ff; 1899, pp. 284 ff.

35. Foreign Relations, 1880, Nos. 227, 239, 247.

36. Ibid., 1902, No. 143.

37. J. Fred Rippy, The Capitalists and Colombia (New York, 1931), pp. 78-9.

38. Ibid., pp. 79-81.

39. Robert de Caix, "De l'abus de la protection et de la naturalization au Maroc," Journal de droit international privé, 40 (1913), pp. 79 ff. and personal interview with M. de Caix, who has long been prominent in French colonial affairs.

40. Colliez, Les associations agricoles entre les Européens et les indigènes au Maroc (Paris, 1912), p. 8; Marius Cavaillé, Le Maroc et les perspectives économiques de l'Europe (Grenoble, 1909), p. 62.

41. M. Robert de Caix, interview.

42. Tenth edn. (London, 1903), p. 44.

43. B. H. Williams, op. cit., Ch. VIII, p. 137. American policy in this respect has been undergoing another change in recent years, signalized by withdrawal of Marines from various countries and renunciation of the treaty with Cuba which gave a right of intervention to the United States.

44. B. H. Williams, op. cit., pp. 100-101, citing London Times, June 25, 1923, New York Times, April 4, 1927, and May 14, 1927.

45. Feis, op. cit., p. 299, citing Helfferich, Georg von Siemens, II, 11.

46. Ibid., p. 113, citing annual report of the Company, 1909.

47. Ibid., pp. 149, 245, citing Report of Council of Foreign Bondholders, 1893 and 1894.

48.. Foreign Relations of the United States, 1888, Nos. 87, etc.

49. Die Grosse Politik, Nos. 1137 to 1143; R. Ibbeken, Dos Aussenpolitische Problem, Staat und Wirtschaft in der Reichspolitik, 1880-1914 (Schleswig, 1928), pp. 105-6.

50. This action was taken partly as a result of British pressure, it appears. Tyler Dennett, Roosevelt and the Russo-Japanese War (Garden City, 1925), p. 155.

51. Foreign Relations of the United States, 1905, pp. 124-135.

52. Foreign Rights and Interests in China, II, 1070-1.

53. E. M. Earle, Turkey, the Great Powers, and the Bagdad Railway (New York, 1924), p. 91, pp. 74, 81-2, 111, 189-195, 210-11.

54. Karl Helfferich, Der Weltkrieg, I, Die Vorgeschichte des Weltkrieges (Berlin, 1919), p. 86. However, the Lynch Brothers (Euphrates and Tigris Steam Navigation Company) are said to have been subsidized by the British government, at least in their earlier operations. This might indicate that political usefulness, not mere private pressure, enlisted the later support of British diplomacy. (Cf. Sir Arnold T. Wilson, The Persian Gulf [Oxford, 1928], p. 266.)

55. Earle, op. cit., pp. 256, 259-60.

56. M. M. Knight, The Americans in Santo Domingo (New York, 1928), pp. 34-5.

57. R. H. Bruce Lockhart, British Agent (New York, 1933), pp. 212-13.

58. I have before me several of the Annual Reports of this organization and pamphlets under such titles as "Justice or Plunder, the Facts about Soviet Confiscation and Dishonesty; Soviet Oil Scandal," "Can We Trade with Russia?" and "Can We Trust the Soviets? Being Twelve Reasons against Credits for the Soviet Government."

59. E. M. Borchard, The Diplomatic Protection Of Citizens Abroad (New York, 1915), pp. 95-6.

60. Op. cit., and references there cited.

61. B. H. Williams, op. cit., pp. 124-5 and sources there cited.

62. Ibid., see Foreign Relations of the United States, 1914, 1915, 1916, 1917, under the heading: "Mexico: Forced Loans Imposed upon American Citizens."

63. Foreign Relations of the United States, 1915, pp. 927, 931.

64. B. H. Williams, op. cit., p. 132.

65. Noëlle Roger, "La nouvelle Roumanie," Revue des deux mondes, 35 (September 15, 1926), pp. 285-288.

Dr. Ion Raducano, "Les conséquences de la réforme agraire en Roumanie," Revue économique internationale, 1928, I, 140-147.

66. E. M. Borchard, Opinion on the Roumanian-Hungarian Dispute ... (New Haven, 1927), p. 15.

67. Francis Deák, The Hungarian-Rumanian Land Dispute (New York, 1928), p. 119.

68. Except rural estates not exceeding fifty jugars. (A jugar equals 1.47 acres.)

69. See Deák, op. cit.

>70. Feis, op. cit., p. 112.

71. Die Grosse Politik, Nos. 8952-3; Walter H. C. Laves, "German Governmental Influence on Foreign Investments," Doctoral Dissertation at the University of Chicago, 1927, pp. 183-6.

72. Foreign Relations of the United States, 1915, p. 353; 1918, pp. 401-27. Interest on the bonds of the railway had been guaranteed by the Republic of Ecuador, the road had not operated at a profit, and Ecuador, experiencing financial difficulties, had not met its obligations.

73. Edgar Turlington, Mexico and Her Foreign Creditors (New York, 1930), pp. 271, 274; Foreign Relations of the United States, 1917, p. 1011 .

74. The United States Navy in Peace Time (Washington, 1931), pp. 2-3.

75. Navy Department, Office of Naval Intelligence, The United States Navy as an Industrial Asset (Washington, 1923), p. 5.


Chapter Seven

1. This case study is condensed from my article "Mannesmann Mining Interests and the Franco-German Conflict over Morocco," Journal of Political Economy, XL (February, 1932), pp. 52-72, with permission of the editors.

2. An influential German banker who often served as intermediary between his government and that of France records that a Parisian bank director once told him the following: The banker was called in by Foreign Minister Delcassé, who explained that the French government intended to move forward politically in Morocco and that support on economic lines would be desirable, for which be counted upon the coöperation of the banks. Delcassé said that understandings had been reached with Powers signatory to the Madrid Treaty, namely, England, Italy, and Spain. As the banker added, "and with Germany?" Delcassé exclaimed, "Avec l'Allemagne, jamais de la vie!" (Paul H. von Schwabach, Aus meinen Akten [printed for private circulation, Berlin, 1927, but never published], p. 335.)

3. Oscar Freiherr von der Lancken Wakenitz, Meine dreissig Dienstjahre, 1888-1918, Potsdam-Paris-Brüssel (Berlin, 1931,) pp. 54, 62; H. von Eckardstein, Lebens-Erinnerungen (Leipzig, 1919), p. 248.

4. P. T. Moon, Imperialism and World Politics (New York, 1927), p. 210, citing the Kaiser's notation on Bülow's report of October 5, 1908, quoted from German archives by Brandenburg, Von Bismarck zum Weltkriege, p. 293.

5. See full text in André Tardieu, Le Mystère d'Agadir (Paris, 1912), pp. 1-2, or in my article cited above.

6. This and much of the following material is based on a personal interview with a retired German official whose position at the time necessitated that he have an intimate knowledge of the whole Mannesmann episode. He does not wish his name used.

7. Friedrich Rosen, Aus Einem Diplomatischen Wanderleben (Berlin, 1931), pp. 294-6.

8. Thus, Dr. Wilhelm Arning, Marokko-Kongo (Leipzig, 1912), p. 65 and elsewhere: "In fact, the Mannesmanns ... in the years before 1908 were not only not held back but were actually requested and even urged to proceed." (". . . Man hat sie gefördert und sogar vorwärts gedrängt.") Dr. Heinreich Pohl in Der Rechtfall Mannesmann (Bonn, 1910), p. 7, and likewise in the Zeitschrift für Politik, V (1912), 558-77, makes similar statements.

Pohl writes that in 1904 certain German iron industrialists expressed the intention of securing rights in Morocco, but the German Foreign Office dissuaded them. Then the next year the policy which brought about the Kaiser's landing at Tangier was adopted, whereupon the Foreign Office let it be known that it should like to see these industrialists create German interests in the domains of the Sultan, but this time they refused.

9. "Denkschrift und Aktenstücke über deutsche Bergwerksinterressen in Marokko."

10. August 23, 1906.

11. Whitebook, von Tschirschky to Rosen, November 6, 1906.

12. Documents, Nos. 18, 19, and 20.

13. This statement does not appear in the Whitebook as published, but in a document which the writer had the advantage of using at the Foreign Office in Berlin and which will be referred to as the Confidential Preliminary Whitebook. Apparently this preliminary edition (marked "streng vertraulich") was printed and circulated among the Foreign Office staff before being revised for Publication. In the process of revision some documents were eliminated, others added, and the prefatory remarks were partially rewritten.

14. Whitebook. An interesting sidelight on the attitude of Mulay Hafid and the great game of hunting concessions is furnished by the Whitebook dispatches from Morocco. At the same time that the negotiations with the Mannesmanns were in progress Mulay Hafid was dickering with an Englishman and a Frenchman for the granting of overlapping rights. That these were not actually accorded was due to the fact that the would-be concessionaires lacked ready cash, and not to any scruples on Mulay Hafid's part.

15. Confidential Preliminary Whitebook. Dr. Vassel, vice-consul at Fez, also reported (in a dispatch of August 6, 1909, included only in the Confidential Preliminary Whitebook) that Mulay Hafid had been toying with the Mannesmanns. In the infrequent audiences which he accorded them he talked adventurously of plans contrary to the Algeciras Act---of leasing the hinterland of Melilla for ninety-nine years and similar fantastic notions (Hirngespinste). "The Sultan seems to have grasped that it is his divine right to squeeze Mannesmann. He will doubtless make the attempt, and he regards Mannesmann already as a sort of checkbook in his pocket." The only legal form for the transfer of money which the Sultan would discuss was the gift, not the down-payment.

16. Tardieu, op. cit., pp. 44 f.; Whitebook, p. 30; E. D. Morel, Ten Years of Secret Diplomacy (New York, 1912), p. 116.

17. Interview with M. H. de Peyerimhoff, later president of the Comité des Houillères. He represented the Union des Mines in negotiations with the Mannesmanns.

18. Whitebook.


20. Wilhelm Eduard Freiherr von Schön, Erlebtes (Stuttgart and Berlin, 1921), pp. 107-8.

21. Whitebook, von Schön to Radolin, April 8, 1909.

22. Whitebook, dispatches of April, 1909, especially those of April 22 and April 23 from Radolin.

23. Interview with M. de Peyerimhoff.

24. Whitebook, dispatch from Rosen under date of May 21, 1909.

25. "It is not very pleasant here in Berlin," wrote a Foreign Office official to a German diplomat. "You have seen the Mannesmann hubbub in the newspapers. There is really no basis for it, but it doesn't stop. The Secretary (von Schön) is probably right in thinking that it is pointed at him personally. He has a lot of enemies to whom the uproar is very welcome. Schön would like to leave" (Stemrich to Kiderlen, December 23, 1909, in Ernst Jäckh [ed.], Kiderlen-Wächter ... Briefwechsel und Nachlage, 11, 40).

26. Hans A. Osman, Die Mannesmann-Rechte und das Weissbuch im Lichte der deutschen Presse (1910).

27. In negotiating with the Union des Mines the Mannesmanns contended that they had expended large amounts on their mine prospects in Morocco and therefore must have a correspondingly large share in any compromise arrangement. The Union answered that most of this money had been spent on propaganda in Germany and in bribes and gifts in Morocco and only a small part of it on actual prospecting. (Interview with M. de Cacqueray, managing director of the Compagnie Marocaine.)

28. Marokko Verloren? (1904), Warum brauchen wir Marokko? (1904), West-Marokko deutsch! (1911), published by the League. Cf. Mildred Wertheimer, The Pan-German League, 1890-1914 (New York, 1924)

29. A. Willehn, "Internationale Finanz und Internationale Politik," Europäische Gespräche, VI (October, 1928), 510.

30. A dispatch from the German ambassador in Madrid to his Foreign Office describes the proceedings of the Mannesmanns in obtaining legal opinions there. On the advice of Maître Clunet of Paris---a distinguished French authority who had written an opinion for the Mannesmann side---they went to Dato, president of the Chamber of Deputies, and Moret, leader of the Liberal party. Both issued opinions which coincided with those of Professor Philipp Zorn and the other Mannesmann experts in upholding the Mulay Hafid concessions. They asked and received 600 pesetas each in compensation. (Confidential Preliminary Whitebook, dispatch dated June 30, 1909. This dispatch does not appear in the published Whitebook.) Perhaps in this case the Mannesmanns were seeking political support rather than legal advice.

31. Marokko-Minen-Syndikat, Beantwortung der Amilichen Denkschrift und Aktenstücke über deutsche Bergwerksinteressen in Marokko, Nr. 189 (Berlin, March, 1910).

32. Whitebook.

33. Tardieu, op. cit., pp. 48 ff.

34. Tardieu, op. cit.

35. Die Grosse Politik, No. 10,728 (August 28, 1911).

36. Ibid., No. 10,783 (November 14, 1911). An epilogue to the Mannesmann affair came after the World War. An arbitration court finally recognized on equity grounds twelve of the two hundred claims of the Mannesmann interests and valued them at 30,000 gold francs. These rights were liquidated under the Treaty of Versailles along with other German property in Morocco. The Mannesmanns appear to have recovered a certain amount from the German government on reparations account, but in 1931 they were still seeking to obtain more. A brief shown to the writer by Director Erich Niemann of the central office of the Mannesmann firm in Berlin argues that the government sacrificed the interests of the firm to high politics in 1908 and that the Whitebook of 1910, by marshaling all the arguments against the validity of their concessions, made it possible for their opponents in the arbitration proceedings to answer all their contentions by quoting German sources. Rathenau and Stresemann, among post-war statesmen, recognized the justice of the Mannesmann case for compensation, according to the firm, and Geheimrat Padel of the Foreign Office, who was the German member of the Arbitration Commission, stated in a report of June 15, 1922, that "I have gained the impression by long and unprejudiced study of the whole affair, that the Imperial Government in its time did grave injustice to these enterprisers."

It has been interestingly observed by Moon (Imperialism and World Politics, p. 214, note) that after all the diplomatic effort over iron, that mineral is today not even listed among the exports or resources of Morocco in the country's official Annuaire économique.

37. Basil Williams, Cecil Rhodes (London, 1921), p. 122. As a matter of fact, his "philanthropies" in South Africa yielded a good deal more than five per cent. His principal adventure in Transvaal gold was The Gold Fields of South Africa, Ltd., founded in 1887 with a capital of £255,000, increased to £1,250,000 by 1892 when the company took the name Consolidated Gold Fields of South Africa. By that time it had given up direct working of nearly all its properties and become a huge share trust company in Rand mines, with Rhodes largely responsible for the management. In 1892 the dividend was 10%, in 1893-4 it was 15%, and in 1894-5 no less than 50%. For several years Rhodes himself drew £300,000 to £400,000 annually from the Gold Fields company. This is not to mention his diamond mines at Kimberley which had made his fortune, nor his many other interests. (Ibid., pp. 94, 111.)

38. This seems to have been true also of his associate in financial and imperialist ventures, Alfred Beit. Beit's biographer says that he had no desire for money in itself but threw himself into great enterprise as a game. He left a trust fund at his death for completion of the Cape-to-Cairo Railway. In many of their actions Rhodes and Beit were inspired far more by desire to expand the British Empire and to safeguard British interests as they saw them than by desire for commercial gain. They undertook expansionist activities on their own when official London hesitated, and at certain periods were more British than the British government. (G. Seymour Fort, Alfred Beit [London, 1932], Chs. 1, 2, pp. 80-84,

39. See Chapter 11 on Chartered Companies for a discussion of the British South Africa Company.

40. Williams, op. cit., pp. 246-8.

41. Foreign mining interests had used other characteristic techniques of political influence. Beit's firm in Johannesburg, for example, gave financial support to progressive Boer (anti-Kruger) candidates for office, though the foreigners themselves did not have the right to vote. (Fort, op. cit., p. 133).

42. Williams, op. cit., p. 268.

43. Select Committee on British South Africa. Second Report, with Proceedings and Evidence. British Parliamentary Papers, 1897, VOL IX, p. vi

44. Williams, op. cit., p. 263.

45. Ibid., p. 264.

46. See J. A. Hobson, The Psychology of Jingoism (London, 1901), p. 107.

47. Williams, op. cit., p. 277. Continental European journalists were bribed on behalf of South African capitalists. (Interview with M. Robert de Caix, a French journalist and colonialist, who says "I know, because I was offered some of it myself.")

48. Ibid., pp. 235, 261.

49. Select Committee ... etc., cited above, p. iii.

50. Williams, op. cit., p. 267.

51. The signers were Charles Leonard, a lawyer and politician from Cape Town; Colonel Francis Rhodes, brother of Cecil Rhodes; Lionel Phillips, president of the Chamber of Mines and member of the firm of H. Eckstein and Company, representatives of the chief financial power on the Rand, Wernher, Beit and Company; John Hays Hammond, an American mining engineer, interested financially in Rand mines; and George Farrar, another large mine-owner. The list indicates clearly enough what interests were engaged in the conspiracy. See Select Committee ... etc., cited above, p. vii. For the connections of the signers, Jan Duncan Colvin, The Life of Jameson (London, 1923), 11, 14, 32-36.

52. Select Committee. .. etc., cited above, p. vii. "Mr. Rhodes himself relied upon this letter in his telegram to the Chartered Company in London on 3d January, 1896, as the explanation of Dr. Jameson's invasion.,,

53. Williams, op. cit., p. 273. A contemporary observer wrote, "The English papers are sickening about the Transvaal, a mixture of swagger and poltroonery. One would have thought the less said about Jameson's ignominious defeat by the Boers the better, but our blessed public must needs make a hero of him, a man who fought for thirty-six hours, and had only fifteen men killed and then surrendered, not a pretence of its being in any better cause than money-making and land-grabbing. The 'Times' prints a poem in praise of him by the New Poet Laureate ... so low are we sunk." W. S. Blunt, My Diaries (London, 1919), I, 264.

54. Williams, op. cit., p. 285.


Chapter Eight

1. See the concise summary of events in Nicaragua given by Charles A. Beard in The Idea of National Interest (New York, 1934), pp. 170-182.

2. Parker T. Moon, Imperialism and World Politics (New York, 1927), pp. 437-450.

3. Arthur D. Howden Smith, Commodore Vanderbilt (New York, 1927), pp. 161 ff., 178-81, 201 ff., 217; Rafael de Nogales, The Looting of Nicaragua (New York, 1928), pp. 38-9.

4. Report of the Belgian minister in Rumania, quoted in "Belgische Kapitalsinteressen in Rumänien," Report No. 2 of Section VII of the Political Department, attached to the (German) Governor-General in Belgium, 1918.

5. Robert W. Dunn, American Foreign Investments (New York, 1926), p. 17.

6. Interviews in Bucharest, particularly with Dr. Virgil Madgearu, who was a leader of the Peasants' Party closely concerned with the 1929 law, Minister of Commerce Mihaïl Manoïlesco, and Mr. Gartner of the Astra Romana (the Royal Dutch company in Rumania). Also newspaper clippings of November, 1924, and October, 1928, and Gerhard Schacher, Der Balkan und seine wirtschaftlichen Kräfte (Stuttgart, 1930), p. 32.

7. Wilhelm Bitter, Die Wirtschaftliche Eroberung Mittel-Amerikas durch den Bananen-Trust (Braunschweig, Hamburgische Forschungen, 1921), p. 104.

8. Ibid., p. 110.

9. Sir Percy Sykes, History of Persia (London, 2d edn., 1921), II, 534.

10.. L. J. de Bekker, The Plot Against Mexico (New York, 1919), pp. 15, 22, 26-8, 207-8.

11. One observer writes that "The Company appears to have adopted a policy of appealing as little as possible to the United States government for help, which may well account for the minor character of the government's recent activities in the countries where the Company is dominant. Instead, it seems to have built up types of remedies and even of control which lie quite outside the sphere of the United States government's activities, and which, it has been suggested, bear some analogy to the operations of the old British East India Companies." (James W. Angell Financial Foreign Policy of the United States, A Report to the Second International Studies Conference on the State and Economic Life, London, 1933, prepared for the American Committee appointed by the Council on Foreign Relations, New York, p. 48.)

12. To examine their more fundamental aspects one would have to begin by reaching into the historical processes behind modern capitalism, the sociological bases of national consciousness, and other such great problems.

13. Quoted in Charles A. Beard, The Idea of National Interest: in Analytical Study in American Foreign Policy (New York, 1934), p. 336, from New York Times, April 26, 1927. President Coolidge was speaking before the United Press Association. Professor Beard also quotes from an address by Secretary of the Navy Wilbur to the Connecticut Chamber of Commerce in which the Secretary listed "twenty million tons of merchant shipping ... worth $3,000,000,000 ... loans and property abroad, exclusive of government loans, of over $10,000,000,000 ... the volume of exports and imports for a single year, about $10,000,000,000 ... the $8,000,000,000 due us from foreign governments," among the material portions of national interest which the American navy must unhesitatingly defend abroad. World-wide interests require world-wide defense. An American child crying on the banks of the Yangtze a thousand miles from the coast can summon the ships of the American navy up that river to defend it from unjust assault." (New York Times, January 11, 1927.)

14. Beard, op. cit., pp. 412-13.

15. Carl Hovey, The Life Story of J. Pierpont Morgan (New York, 1912), pp. 282-3.

16. Beard, op. cit., pp. 193-4.

17. Charles R. Flint, Memories of an Active Life (New York, 1923), p. 89.

18. The appointment naturally aroused widespread comment and was regarded in Great Britain as "an ominous sign that a very real connection existed between the economic enterprises of the Deutsche Bank and the Near Eastern activities of the German Foreign Office." (E. M. Earle, Turkey, the Great Powers, and the Bagdad Railway (New York, 1924), pp. 97-8.)

19. André Chéradame, La question d'Orient (4th edn., Paris, 1915), p. 274.

20. See older editions of Who's Who (London).

21. The De Barco oil concession, cancelled by the Colombian government in 1926, belonged to the Gulf Oil Company, controlled by Mellon interests. The concession was a subject of dispute and diplomatic representations for years. In 1930 Dr. Herrera, who for eight years had been Colombian minister to Washington, was elected President of Colombia. When he visited the United States again before taking office he was very kindly received, according to his own account, both by old friends and by "other persons who, connected in someway with Colombia, found an opportunity to get in touch with me, the President-elect, and to discuss affairs of our country.... The Secretary of State, Mr. Stimson, gave me a dinner in the name of the Government, and among others, Mr. Mellon, Secretary of the Treasury, attended this dinner. We frankly discussed the problems of Colombia in which he showed his interest. . . ." "Mr. Mellon then said to me: 'Settle your pending questions on petroleum; decide fairly and justly the difficulties which have been presented in this respect; and once you have adopted a policy which gives stability to the industrial activities in this branch, there will be opened for Colombia, no doubt, ample ways for its economic progress and for its financial restoration.'" (Sale of Foreign Bonds or Securities in the United States, Hearings before the Committee on Finance of the United States Senate, 72d Congress, 1st Session [Washington, 1932], III, 1918, quoting El Tiempo, Bogota, August 7, 1931.)

The New York Times reported that in the same press interview President Herrera "reiterated his confidence in eventual benefits of the Gulf Oil concession, and recalled Secretary of the Treasury Mellon's advice to him to settle the petroleum problems to hasten Colombia's recovery." (Ibid., p. 1905.)

22. Herbert Croly, Willard Straight (New York, 1925).

23. A. M. Pooley, Japan's Foreign Policies (London, 1920), p. 163.

24. Herbert Feis, Europe the World's Banker: 1870-1914 (New Haven, 1930), p. 380, footnote.

25. In the spring of 1930 the parliament of France comprised 144 Deputies and 118 Senators, who together are said to have held 1019 positions as directors of business corporations, banks, and the like. (Richard Lewinsohn, Das Geld in der Politik [Berlin, 19301, pp. 250-253, citing "Parlementaires et Financiers," by R. Mennevée, Les Documents Politiques [Paris, April, 1930]).

According to a study made by the research organization of the Labour party, the 255 members of the House of Commons in 1923 had directorships in 713 companies , while the members of the House of Lords were charged not only with the general welfare but also with that of 761 companies. Banks were represented by 19 directors in the lower house and 66 in the upper, shipping companies by 30 and 26 respectively, the heavy industries by 30 and 50, and so on. (Labour and Capital in Parliament, Labour Research Department, London, 1923. Cited by Lewinsohn, op. cit.)

26. Chapter 3.

27. Zetland, Lord Cromer (London, 1932), pp. 19, 49-5 1; Burke's Peerage and Baronetage (London, 1921).

28. Lewinsohn, op. cit., pp. 253-4.

29. Freidrich Thimme, "Auswärtige Politik und Hochfinanz," Europäische Gespräche, 1929, VII, 288 ff.; Lewinsohn, op. cit., pp. 44-5.

30. Bernhard Huldermann, Albert Ballin (Berlin, 1922), pp. 204 ff

31. Ereignisse und Gestalten (Leipzig, 1922), p. 193.

32. Sale of Foreign Bonds or Securities in the United States, cited above, testimony of Mr. Lancaster, III, 1683.

33. Chapter 3.

34. Chapter 5.

35. See Chapter 10.

36. Chapter 11.

37. Leases upon Naval Oil Reserves, Hearings before the Committee on Public Lands and Surveys, U. S. Senate, 67th Congress, 4th Session, Pursuant to S. Res. 282, 294, 434 (Washington, 1924), p. 1952.

38. See Investigation of Mexican Affairs, Hearings before a sub-committee of the Committee on Foreign Relations, U. S. Senate, 66th Congress, 2d Session, Pursuant to S. Res. 106, directing the Committee on Foreign Relations to investigate the matter of outrages on citizens of the United States in Mexico (Washington, 1919-20).

39. That is, "democracy" is thus converted into "plutocracy," to use Lincoln Steffen's phrase. See his fascinating general discussion of this subject in his Autobiography.

40. Sir Lewis Michell, The Life of the Rt. Hon. Cecil John Rhodes (London, 1920), p. 49.

41. Williams, op. cit., pp. 135-6, 142, 192

42. Stanley K. Hornbeck,` Struggle for Petroleum," Annals of the American Academy of Political and Social Science, 112 (March, 1924), 170.

43. E. L. Doheny testified that ". . . there are few men who expect to quit the Government that do not come around and look to the large concerns to look for positions of some sort. I suppose I have dozens of positions asked for.... They are all looking for positions that give better pay than they get in the regular service of the Government." (Leases upon Naval Oil Reserves, cited above, p. 1803.)

44. Leases upon Naval Oil Reserves, cited above, pp. 1939, 1970, 2059 ff.

45. op. cit., pp. 1940-1, 1014,1804, 1937.

46. Ibid., p. 1938

47. Creel testified that at the time of his employment Doheny "protested very vehemently that he was sick and tired of being called an interventionist, when all that he desired was peace and love and justice," but soon "we were not only not seeing eye to eye, but we were not seeing in the same general direction. He was a man who seemed utterly unable to view anything except in the light of his own desires. Whatever he wanted was right; whatever was opposed to him was the work of enemies and devils." (Ibid., pp. 2123 ff.)

48. With Sullivan and Cromwell, counsel for the Carib Syndicate, was Mr. Robert E. Olds, former Under-secretary of State, and Mr. Allen W. Dulles, former chief of the Division of Near Eastern Affairs, Department of State. With counsel for the National City Company was Mr. Garrard Winston, former Under-secretary of the Treasury. (Sale of Foreign Bonds or Securities, cited above, pp. 1812, 1814, 1833, 1886, and Who's Who in America.)

49. Ibid., p. 1814.

50. He worked on commission, receiving $40,000 for the flotation in which a half million dollar bribe was paid to the son of the president of Peru. (Ibid., pp. 128, 1288-9.)

51. Feis, op. cit., p. 159; E. Judet, George Louis (Paris, 1925), p. 248; Raymond Poincaré, Au Service de la France (Paris, 1926), I, 268.

52. Les documents politiques, diplomatiques, et financiers, III (November, 1922), 250; IV (January, 1923), 25.

53. Wilhelm Mautner, "Erdölkonflikte heute und morgen," Europäische Gespräche, VII (1929), 194-5.

54. L. J. de Bekker, op. cit., pp. 6, 287, 291, and testimony before the Fall committee there cited.

55. Rafael de Nogales, op. cit., p. 45.

56. Alleged Payments by the Mexican Government to United States Senators, Hearings before a Special Committee ... United States Senate, 70th Congress, 1st Session (Washington, 1927), pp. 9, 13-19, 36, 327.

57. They Told Barron. Conversations and Revelations of an American Pepys in Wall Street. The Notes of the Late Clarence W. Barron, edited and arranged by Arthur Pound and Samuel Taylor Moore (New York, 1930), p. 153.

58. The German diplomatic representative in Paris, von Lancken, reported this to his government in a somewhat sardonic account of a conversation with Tardieu which began "M. André Tardieu, the well-known editorial writer of the Temps, is no longer satisfied with his outstanding journalistic position. He wants, as has been repeatedly mentioned in this correspondence, to play an active and decisive rôle in foreign politics." In the Homs-Bagdad matter, Tardieu had suggested a sort of compromise between the German Bagdad Railway plans and the French plans. "In my opinion he is not guided only by motives of pure idealism. He wants above all to gratify the ambition so fully justified by his talents.... Therefore, M. Tardieu's assurance seems to me worthy of belief that in this mission [he was going to Berlin] he would act quite apart from his capacity as journalist and would come only as agent of the French financial group (he mentioned especially the names: Vitali, Neufville, Bardac)." (Die Grosse Politik, No. 10,004, July 5, 1910.)

59. The above account is based upon correspondence exchanged among Tardieu, Maimon, Barry, and others, published by Le Rappel from April 23 to May 3, 1911, and collected in the brochure La Diplomatie secrète sous la troisième République, 1910-1911 introduction by Charles Paix-Séailles [Courrier Européen, 19121. The essential facts were summarized by Félicien Challaye in La Revue du Moir, June, 1911, pp. 749-753, and republished for propaganda purposes with additional matter and attacks on Tardieu in 1929 under the title, Un aspirant dictateur, 4ndri Tardieu (Editions de "La Révolution Prolétarienne").

The correspondence so published seems to be authentic. There were even more sensational aspects of the Homs-Bagdad affair, recounted by Challaye. Bernard Maimon was arrested on March 31, 1911, on complaint of M. Pichon, charged with having abstracted a considerable number of documents from the Ministry of Foreign Affairs through an employee and having delivered them to newspapers. Challaye says that these stolen documents formed the basis of campaigns carried on in Le Temps and other papers. Maimon was sentenced to two years in prison, and Challaye quotes the judgment of the court as follows (my translation):

". . . Maimon told Rouet [the accomplice in the Ministry of Foreign Affairs, sentenced to three years] of efforts which he had been making for several years to obtain the concession for a railway in the Orient to the profit of a group of French and foreign personages; ... Rouet, to whom a share was promised (apparently it was to be 30,000 francs), agreed to enter into the views of Maimon and to assist the action of his group under certain circumstances by furnishing him with indications and information which his position at the Ministry of Foreign Affairs permitted him to gather and which Maimon would utilize, le cas échéant, either directly, or to try to exert pressure by the publication of articles or news." The culprits acted, said the court, "not with the premeditated intention of betraying French interests, but for the profit of an industrial and financial enterprise which does not appear illicit in itself .....

60. Found in the Journal Officiel, Chambre, Docs. Paris., No. 376, S. E. 1910, pp. 369 ff. The report was written by Deputy Maurice Viollette for the committee on local budgets of the colonies and was subsequently published separately: Maurice Viollette, La N'Goko Sangha (Paris, 1914). References are to this volume.

61. The committee held that these were unjustified either in equity or law, citing particularly articles in the concession agreement under which the Company obligated itself not to seek indemnities for frontier changes or for lack of security of the country. (Viollette, op. cit., pp. 171-3.)

62. Ibid., p. 78.

63. A boundary commission subsequently decided that Missum-Missum was in German territory. Ibid., pp. 66, 81.

64. Ibid., p. 84.

65. Oscar Freiherr von der Lancken Wakenitz, Meine dreissig Dienstiahre, 1888-1918 (Berlin, 1931), pp. 91-2. Von Lancken says that Tardieu was a relative of Mestayer, head of N'Goko Sangha, as well as an associate in this business.

66. See the article and pamphlet by Félicien Challaye cited in connection with the Homs-Bagdad affair, also E. D. Morel, Ten Years of Secret Diplomacy (London, 1915), pp. 118-9.

67. See the testimony of Joseph Caillaux and his summary of the whole episode in Agadir, Ma Politique Extérieure (Paris, 1919), pp. 55-71.

68. And in his book, Le Mystère d'Agadir (Paris, 1912), which in Part II gives his version of the Congo consortium with much interesting detail.

69. Viollette, op. cit., p. 80.

70. London: Richards Press, 1901, pp. 107

71. When Rhodes went into Cape politics in 1881, says a biographer, he bought a share in the Cape Argus in order to have an organ to print his speeches and other things he might give it, though he assured the editor he would not interfere with its policies. In the time of the Chartered Company he also "had a keen eye to the value of the press and exercised considerable control over a group of South African newspapers: not that he dictated their policy, but he was at any rate sure of their general support. His general attitude on this question is well illustrated by his remark to Garrett, the editor of the Cape Times: 'I have never inspired an article in your paper, or requested that a given line should be taken, but you might at least be careful about facts.'" (Williams, op. cit., pp. 58, 192.) Being "careful" about " facts may, of course, be the most effective means of propaganda.

Footnotes, continued

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