The Bretton Woods Conference (July 1-22, 1944) is in importance on a par with such events of the Second World War as the Yalta meeting of the heads of the anti-Hitler coalition (February 4-11, 1945) and the Potsdam Conference (July 17 - 2 August 1945). In most studies on Bretton Woods, the hotly debated question of the fate of the Bank for International Settlements (BIS) still remains behind the scenes.
The history of the BIS
At the Paris Peace Conference of 1919, it was decided that defeated Germany would pay reparations to the victors. The amount of reparations was serious, and the terms of payments stretched until the end of the twentieth century. Initially, the Versailles Peace Treaty set the amount of reparations at 269 billion gold. marks (equivalent to 100 thousand tons of gold). Later, the Reparation Commission revised the amount, reducing the amount of reparations to 132 billion gold. stamps. In the 20s of the last century, Germany paid reparations, but in amounts much less than envisaged by the decisions of the Paris Conference.
In 1924, on the initiative of the American Vice President Dawes, a plan was adopted, according to which, on the one hand, the burden of reparations for Germany was mitigated, and, on the other hand, Anglo-American capital began to contribute to the economic development of Germany. This was Dawes' plan. In 1924-1929. Germany, under the Dawes plan, received loans from the United States in the amount of $ 2.5 billion, from Great Britain - in the amount of $ 1.5 billion. In 1929, this plan was replaced by the Young's plan (named after the American financier), which provided for even more active introduction of American capital into the German economy. Jung's plan, among other things, provided for the creation of the Bank for International Settlements (BIS), which, according to official statements, was supposed to ensure the transfer of reparation payments from Germany to the winning countries. The BMR was born in 1930. The headquarters of the bank is Basel.
However, on July 15, 1931, Germany unilaterally announced the termination of all reparations payments, citing the outbreak of the economic crisis. The Anglo-Saxons, surprisingly, reacted to the German statement "with understanding." It would seem that the BIS could have been closed, but the bank continued to work. Only now financial flows through the BIS have gone in the opposite direction. We are talking about American and British capital (loans and direct investment), which were sent to the German economy. Moreover, it was clear that these capital are intended not only and not so much for the reanimation of the German economy in order to ensure reparation payments. France, as the main beneficiary of reparations payments, continued to receive crumbs. Anglo-Saxon capital has now earned for the remilitarization of Germany,which violated the terms of the Versailles Peace Treaty. Between the two world wars, the BIS became part of the global Anglo-Saxon project to restore the military-economic potential of Germany and prepare it for a war against the USSR.
The BIS has become an outpost of American capital in Europe. Although it was created as a commercial public bank, its immunity from government interference and even taxation was guaranteed by an international treaty signed in The Hague in 1930. The main initiators of the creation of the BIS were financial oligarchs of world caliber: bankers of the Federal Reserve Bank of New York from Morgan's inner circle, director of the Bank of England Norman Montague, German financiers Helmar Schacht (at that time the President of the Reichsbank, and later the Nazi Minister of Economy, who had powerful connections to Wall Street), Walter Funk (succeeded G. Schacht as president of the Reichsbank), Emil Poole.
The founders of the BIS were the central banks of England, France, Italy, Germany, Belgium, as well as a number of private banks. On behalf of the United States, the BIS Charter was signed by the private banks First National Bank of New York, D. P. Morgan and Company and First National Bank of Chicago. They were all part of the Morgan empire. Japan was also represented in the BIS by private banks. In 1931-1932. 19 central banks of European countries joined the BIS.
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The first president of the BIS was the Rockefeller banker Gates McGarr. In 1933 he left this post. He was replaced by the American Leon Fraser, the Morgan's protege. During the Second World War, the president of the bank was again the American Thomas Harrington McKitrick.
BMR in the service of the Third Reich
Before America's entry into World War II, the BIS served as a conduit for American capital to flow into the economy of the Third Reich. During the war years, the BIS carried out calculations for Germany on the supply of goods with various countries, including those for which Germany was a military enemy. After Pearl Harbor, throughout the war years, the BIS was mentioned in all official guides as the correspondent bank of the Federal Reserve Bank of New York. The BIS was the place where the gold plundered by Germany in various European countries was flocked.
In March 1938, after the Nazis entered Vienna, most of the Austrian gold stolen by them migrated to the BIS safes. The same fate befell the gold reserves of the Czech National Bank - $ 48 million.
After the outbreak of World War II, gold flowed into the BIS, which the Third Reich "mined" in concentration camps and as a result of various raids to rob civilians in occupied countries (jewelry, gold crowns, cigarette cases, dishes, etc.). We are talking about the so-called Nazi gold. It was usually processed into standard bullion and sent to the BIS, other Swiss banks or outside Europe. The BIS, on the instructions of the Reichsbank, could move gold bars to vaults in different countries, as well as sell metal. After the US entered the war, the BIS received $ 378 million worth of gold from the Nazis. During the war, the BIS was under Nazi control, and the American president Thomas Harrington McKittrick was the president of the bank. While soldiers and officers of the opposing armies were dying on the fronts,In Basel, four meetings of the BIS leadership were held with the participation of bankers from Germany, Japan, Italy, Belgium, England and the United States. Full mutual understanding of the representatives of the warring countries reigned here.
It is worth saying how many words about the history of the capture of Czech gold by the Third Reich with the help of the BIS. In March 1939, Nazi troops captured Prague. Members of the board of the Czech National Bank were arrested. The Nazis, threatening with weapons, demanded the release of the national gold reserves. Frightened members of the bank's board reported that the gold had already been transferred to the BIS. As it turned out later, the gold from Basel then migrated to the vault of the Bank of England. On a command from Berlin, the gold was transferred to the Reichsbank account in the BIS, while physically it remained in the Bank of England. Then the Bank of England began to carry out various operations with gold on the teams that went from the Reichsbank to the BIS. There was a criminal conspiracy of three parties - the Reichsbank, the BIS and the Bank of England. In this regard, a scandal began in England in 1939,since the Bank of England transacted Czech gold on commands that came from Berlin and Basel, and not from the Czech government. In particular, in June 1939, three months before the declaration of war between Great Britain and Germany, the Bank of England helped the Germans sell gold for 440 thousand pounds and ship part of the German gold reserves to New York.
It turned out that the Bank of England carried out illegal operations with Czech gold with the tacit consent of the British government. Prime Minister Neville Chamberlain, Treasury Secretary John Simon, and other high-ranking officials openly lied (they say that the gold was returned to its rightful owner or was not transferred to the Reichsbank at all). Coordinating the criminal joint activities of the Bank of England and the BIS was helped by the fact that the chairman of the Bank for International Settlements throughout the war was Norman Montague, director of the Bank of England, who did not hide his sympathies for fascism.
Even more scandalous was the story of Belgian gold, which happened after the start of the war. In June 1940, it became known that Alexander Galopin, who represented the Bank of Belgium on the BIS Board of Directors, had intercepted $ 228 million in gold transferred by the Belgian government to the Bank of France and sent them through Dakar to the Reichsbank.
Sentence to the Bank for International Settlements
The BIS's connections with the Nazis and the Third Reich during the war were so obvious that it could not but cause outrage in countries that fought against Germany and at the same time were represented in the BIS. We are talking specifically about the UK and the USA. The story of Czech gold has forced British politicians to periodically raise the question of the advisability of the Bank of England's continued stay in the BIS shareholders. In May 1942, a member of Parliament from the Labor Party of England J. Strauss made an inquiry to the Minister of Finance about the activities of the BIS, and on March 26, 1943, Congressman D. Voorhees presented a draft resolution to the House of Representatives of the US Congress, in which he called for an appropriate investigation. However, the advancement of the resolution was blocked. Washington State Congressman John Coffey introduced a similar draft resolution to Congress in January 1944. He indignantly declared at the meeting: “The Nazi government has 85 million Swiss gold francs in the account of the BIS. Most of the board members are Nazis! How can American money stay in this bank? " Coffey also drew attention to the fact that American and British shareholders continue to receive dividends from the hands of the Germans and Japanese, and they, in turn, profit from the capital, profitably placed in America. And yet the draft resolution was shelved. US Treasury Secretary G. Morgenthau also repeatedly questioned the advisability of the presence of American banks among the BIS shareholders. Most of the board members are Nazis! How can American money stay in this bank? " Coffey also drew attention to the fact that American and British shareholders continue to receive dividends from the hands of the Germans and Japanese, and they, in turn, profit from capital, profitably placed in America. And yet the draft resolution was shelved. US Treasury Secretary G. Morgenthau also repeatedly questioned the advisability of the presence of American banks among the BIS shareholders. Most of the board members are Nazis! How can American money stay in this bank? " Coffey also drew attention to the fact that American and British shareholders continue to receive dividends from the hands of the Germans and Japanese, and they, in turn, profit from capital, profitably placed in America. And yet the draft resolution was shelved. US Treasury Secretary G. Morgenthau also repeatedly questioned the advisability of the presence of American banks among the BIS shareholders. US Treasury Secretary G. Morgenthau also repeatedly questioned the advisability of the presence of American banks among the BIS shareholders. US Treasury Secretary G. Morgenthau also repeatedly questioned the advisability of the presence of American banks among the BIS shareholders.
At the conference in Bretton Woods, the issue of the Bank for International Settlements came up during the discussion of the project to create the International Monetary Fund. At first, some delegates drew attention to the fact that the IMF and the BIS in some cases may duplicate each other or compete. And then the conversation turned about the criminal nature of the BIS and the need to close the bank as soon as possible. The tone of the discussion was set by the Norwegian economist Wilhelm Keilau. He expressed his indignation at the fact that Washington continued to maintain relations with the BIS, and therefore with the enemies of his country.
At a meeting of the conference on July 10, 1944, Keilau introduced a draft resolution that provided for the dissolution of the BIS as soon as possible. Keilau also prepared a draft second resolution, in which it was proposed to conduct an additional investigation using the reports and documents of the BIS for the war period. Strong pressure was immediately exerted on the Norwegian economist, as a result of which Keilau withdrew the draft of the second resolution from the discussion. Keilau's speeches made it to Washington and Wall Street, where they caused concern.
Bankers Winthrop Aldrich and Edward Brown, members of the American delegation representing the Chase National Bank and the First National Bank of New York, tried to reject Keilaw's already submitted draft. They were supported by the Dutch delegation and J. Beyen, the former president of the BIS and the intermediary in the transfer of Czech gold stolen by the Nazis to the bank, Leon Fraser, who represented the First National Bank of New York, also sided with them. The British delegation took the same position with the full support of Anthony Eden and the Foreign Office.
US Undersecretary of State Dean Acheson represented the Department of State in the US delegation. As a former lawyer for Standard Oil, he belonged to the Winthrop Aldrich camp. The minutes of Morgenthau's meetings with Edward Brown, Acheson and other members of the delegation, held on July 18-19, 1944 at the Mount Washington Hotel in Bretton Woods, confirm that Acheson fought to preserve the BIS until the end of the war and tried to prove that the bank was a cosmopolitan will serve as a convenient financial leverage for the United States to influence the industrial recovery of post-war Germany. It must be admitted that in this respect he was absolutely right.
Senator Charles Toby of New Hampshire took, judging by the minutes of the Mount Washington meetings, a patriotic position. At the meeting on July 18, he angrily threw out to all those present: "Your silence and inaction are helping the enemy." Morgenthau agreed. He believed that the dissolution of the BIS would be an important propaganda step and would benefit the United States. Acheson, furious, declared that the BIS should be retained "as a foreign policy tool." The discussion was heated, but in the end the conference in Bretton Woods on July 10, 1944 decided to eliminate the BIS.
Life of the BIS after the death sentence
However, the implementation of this decision was torpedoed by the Anglo-American bankers, who were afraid not only of the closure of the BIS, but also of a possible investigation that would reveal their unseemly role in the preparation of World War II and their cooperation with the Nazis. In addition, many politicians believed that the BMR would still be useful for behind-the-scenes games in the post-war world.
Indeed, the Bank was involved in conducting operations under the Marshall Plan, assisting the IMF and IBRD, and performing multilateral clearing for the European Payments Union. The BIS was the financial agent of the European Coal and Steel Community, the International Red Cross, the Universal Postal Union and other international organizations. When the dollar came under attack in the 1960s, the BIS came to the rescue of the US currency by organizing large cash and gold swaps.
Most importantly, the BIS has become a club of central banks. It is sometimes referred to as the "central bank bank". Central banks of 55 countries, as well as the European Central Bank (ECB) are represented in the BIS. The Bank of Russia became a member of the BIS in 1996. The most important issues of the modern world monetary and financial system are being resolved in Basel. Moreover, they are solved more quickly and efficiently than in the IMF, because the IMF is an international organization controlled, albeit nominally, by national governments. And the BIS is a supranational structure, not controlled by governments and directly controlled by a very narrow group of bankers.
Today, when the IMF is experiencing a crisis that could lead to its collapse, the BIS can become the world's # 1 financial institution. In this case, for the first time in history, the world financial system will come under the control of a supranational lobby.
