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A Century of War
Under the Dawes Plan, Germany paid reparations for five years, until 1929. At the end of 1929, she owed more than at the beginning. It was a scheme of organized looting by the international banking community dominated by London and New York. Guarantees were made for reparations payments of special funds in Germany. An agent-general for reparations, S. Parker Gilbert, a J.P. Morgan partner and protégé of Owen D. Young, was installed in Berlin to collect the repayments for the Anglo-American banks. With their risk thus all but nil, the London and New York banks began a vastly profitable lending to Germany, money which was recycled back to the banks of New York and London in the form of reparations with commission and interest. It was a vast international credit pyramid at the top of which sat London and ultimately, the New York banks. Between 1924 and 1931 Germany paid 10.5 billion marks in reparations, but borrowed 18.6 billion marks from abroad. German recovery after 1923, under the guiding hand of Montagu Norman and his Reichsbank colleague, Hjalmar Schacht, was all controlled by the borrowings from the Anglo-Americans. There were no more fears of any Rapallo initiatives upsetting the Anglo-American order—that is, until the pyramid collapsed in 1929, when the credit flowing from the New York and London banks into Germany to roll over the debt suddenly stopped.9 THE ANGLO-AMERICAN RED LINE By then, the Anglo-American power struggle for primacy in world finance and economic affairs had been resolved. The oil wars, which had shaken the world for more than a decade, were finally resolved in a ‘ceasefire,’ which resulted in the creation of an enormously powerful Anglo-American oil cartel, later dubbed the ‘Seven Sisters.’ The peace agreement was formalized in 1927, at Achnacarry, the Scottish castle of Shell’s Sir Henri Deterding. John Cadman, representing the British government’s Anglo-Persian Oil Co. (British Petroleum), and Walter Teagle, president of Rockefeller’s Standard Oil of New Jersey (Exxon), gathered under the cover of a grouse shoot to conclude the most powerful economic cartel in modern history. The Seven Sisters were effectively one. Their secret pact was formalized as the ‘As Is’ agreement of 1928, or the Achnacarry agreement. British and American oil majors agreed to accept the existing market divisions and shares, to set a secret world cartel price, and to end the destructive competition and price
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