“O but we dreamed to mend
Whatever mischief seemed
To afflict mankind, but now
That winds of winter blow
Learn that we were crack-pated when we dreamed.”
(W.B. Yeats, “Nineteen Hundred And Nineteen”)
The peace talks consequent to the November 11, 1918 armistice which ended the First World War took place at Versailles, France, in the Hall Of Mirrors, in 1919.
At the close of the Great War (World War I), Britain and other European nations confronted enormous debts. How would the “Great” Britain pay all the money it owed? In a surprise move, Britain adopted the then-novel idea of breaking the connection between the British pound and gold. To pay her war debts, Britain printed paper money backed by nothing. Later, in 1925, after the paper money had paid down Britain’s war debts, Winston Churchill, Britain’s Chancellor of the Exchequer, abruptly put Britain back on a gold standard. Earlier, when Britain had broken the gold link for the British pound, the world’s gold migrated to the United States and a “roaring twenties” boom resulted. Then, when Churchill did his about-face in 1925, the gold migrated out of the United States and a contraction of the money supply occurred. (Background: 1920s Gold Migrations, Ersjdamoo’s Blog entry of September 27, 2013.)
Germany had not surrendered in 1918. The word “armistice” is from the Latin arma + stitium, meaning a temporary suspension of hostilities, a truce. It does not mean a surrender. (Incidentally, the November “Veterans’ Day” holiday, a stingy holiday given only now to bankers and government employees, is what we supposedly celebrate on November 11th of each year: the 1918 Armistice.)
Huge debts followed the Great War. Consequent to Versailles, a fine of $33 billion was imposed on Germany. Managing implementation of the settlement were bankers, not statesmen. The blood money of the vast war tribute was crystallized into billions of dollars in bonds, offered for sale to the American people on assurances from the bankers. But Germany felt that since it had never surrendered, punitive damages could be rejected. Apparently, American investors were suckered into buying “reparation bonds,” and in that way war debts were paid down under false pretenses.
The Hall Of Mirrors was where scores of illusions coexisted with one reality also present: but which were the illusions and which the reality? Bankers not statesmen managed the peace. “Reparation” bonds were sold to too-trusting investors. Yet Germany did not completely acknowledge owing any punitive damages, since it had never surrendered. In 1925, France and Germany met onboard a small boat, the “Orange Blossom.” Newspapers ballyhooed the historic nature of the meeting, and thereby, by sleight-of-hand, the issue of Germany and the disputed $33 billion damages was sidelined. Later, France and Germany privately agreed “that bonds should be sold outside Europe and that Germany should, for its co-operation, receive one-third of the money thus obtained.”
“Meanwhile, preparations had been made in America for the purchase of these blood bonds. The borrowing rate of money became surprisingly low in our Federal Reserve Banks… Hundreds of millions of dollars of German bonds were sold at a price better than $90.00 each to hundreds of banks.” But then, Lo! The “Orange Blossom” agreement became discredited in France. Most Germans never had any intention of honoring such bonds. The price of the German bonds collapsed, sinking from $91 to $68. Simultaneous with the collapse came economic depression in the United States. “The banks which invested in these bonds feverishly called their loans made to speculative individuals to protect their bond purchases. The market crashed! Those who had bought on margin were ruined!”
And so, it can be understood that enormous sums of money were exported from the United States “especially to the national banks of allied governments whose policies have been identified with the Treaty of Versailles.” The growing realization that these reparation bonds would never be honored “had something to do with the crash of the stock market, which had been artificially inflated to secure the money which was poured abroad.”
(Source: By The Sweat Of Thy Brow, by Rev. Charles Coughlin. 1931.)
(A version of the above was first published at my old Conspiracy Nation web site on February 23, 2005.)