The United States Rivals Britain
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amount and means for Germany to repay its war damages to the Entente powers. And, being good conservative bankers, Morgan and friends could not let the war loans of the Allied powers simply be forgotten in the euphoria of peace, despite the assumptions of A.J. Balfour and others in the British government that such magnanimity would follow. Morgan & Co. had quietly shifted their private British government loans over to the general debt of the U.S. Treasury as soon as the United States officially entered the war, in effect making the British debts the burden of the American taxpayers after the war. Despite this, Morgan interests made sure they had a major stake in the postwar Versailles reparations financing. As the U.S. war debt grew beyond anything known before in her history, the distinction between Morgan’s interests and that of the government became blurred. The U.S. government increasingly made itself simply a useful instrument for the extension of the new power of New York’s international bankers. NEW YORK BANKERS CHALLENGE THE CITY OF LONDON During the course of the Versailles talks, a new institution of AngloAmerican coordination in strategic affairs was formed. Lionel Curtis, a longtime member of the secretive Round Table or ‘new empire’ circle of Balfour, Milner and others, proposed organizing a Royal Institute of International Affairs. The proposal was made on May 30, 1919, in the midst of the Versailles deliberations, at a private gathering at the Hotel Majestic. Philip Kerr (Lord Lothian), Lord Robert Cecil and other members of the Round Table circle attended that formative meeting. The first nominal mission of the new institute would be to write the ‘official’ history of the Versailles peace conference. The Royal Institute received an initial endowment of £2,000 from Thomas Lamont of J.P. Morgan. Historian Arnold J. Toynbee was the institute’s first paid staff member. The same circle at Versailles also decided to establish an American branch of the London Institute, to be named the New York Council on Foreign Relations, so as to obscure its close British ties. The New York Council was initially composed almost entirely of the Morgan men, financed by Morgan money. It was hoped that this tie would serve to weld American interests into harmony with England’s after Versailles. This was not to occur for some years, however.4
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