CHAPTER XIV
PLUS ÇA CHANGE
Articles against peace are written with pens made of the same steel as cannon and shells.
—ARISTIDE BRIAND.
“ THE more it changes, the more it’s the same old thing,” say the French, and the French ought to know. They are the countrymen of the cynical Clemenceau, the facile Tardieu, and the scheming Poincaré. No matter what new things the American Moses, with his “ new decalogue,” the Fourteen Points, might insist upon at the peace conference, the makers and interpreters of the peace treaty would see to it that nothing was changed fundamentally. In the name of self-determination of peoples the map of Europe and the Near East was carved up into a new geographic pattern with many small new states. This new arrangement frequently served to emphasise the old system of rival alliances, secret diplomacy, irredenta, etc. “ Mandates ” were established as a move against the old colonialism, but before long every nation looked upon its “ mandates ” as national possessions or protectorates. The “ reparations system ” proved even worse and more disturbing internationally than the old practice of military plunder and indemnities. Peace treaties were written which contained a dozen causes for friction, dispute, and war. And finally a League of Nations was established as a herald of a new era in world affairs, but all too often this body proved to be little more than a buttress for the peace treaties.
If a deliberate attempt had been made to create a situation in which the arms merchants could flourish, nothing better could have been devised. After the “ war to end all war ” was concluded, Schneider, Vickers, Skoda, and even the crestfallen Krupp were literally “ at it ” again.
Indeed the peace conference was still in session when a war between the Greeks and the Turks broke out. A ruthless Mohammedan massacre of Christians was enough to set going the ambition of Venizelos and his soldiers. The English supported the Greeks ; and Vickers arms, through the kind offices of Sir Basil Zaharoff, were amply supplied to the Hellenes as they advanced into Asia Minor. But the French were also interested in the Levant and they did not restrain Schneider from arming the Turks.
And so immediately in this “ new world ” there is the old and familiar phenomenon of two friendly, in fact allied, states, supporting respectively two other warring countries. The World War was over, but the arms factories were still geared up for mass production and they were grateful for any outlet for their wares. The Greeks, whether through bad generalship or because of the inferiority of Vickers products, were put to flight by the Turks and were soon streaming back over Anatolia in great disorder. An American correspondent told the tale :
“ First I saw the retreat of the Greeks. They left behind artillery and machine-guns, all of which bore the marks of the English firm of Vickers. Then I witnessed the triumphant entry of the Turks into Smyrna. They brought with them magnificent guns made by Creusot. On that day I understood what the Entente Cordiale meant.”1
The word “ mandate ” also appeared almost at once virtually synonymous with war and rebellion. The French were made “ guardians ” of Syria ; but the turbulent Druses and Emir Feisal contested their claim, and with no little bitterness, for the British had promised this territory to the Emir. Schneider, of course, supplied the arms and ammunition with which General Sarrail bombarded Damascus and the “ street called straight.” As for the Druses’ equipment, it was surprisingly up to date for desert tribesmen, and it was rumoured that it all came from Birmingham and Leeds. Yet Downing Street, just as in the case of Anatolia, was at peace with the Quai d’Orsay.2
A short time later it looked as if the Quai d’Orsay was at war with itself. Down in Morocco the French had something more authoritative than a mandate, a prosperous colony. Their possession of this was suddenly challenged by that valiant sheik of North Africa’s wild mountains, the hero of all the scattered Mohammedan tribes, Abdel Krim. This leader of the Rif went on the war path and talked ambitiously of a Rif republic. His first encounters were with the Spaniards whose possessions included part of the Rif. Huge Spanish armies were routed and the Rif republic was beginning to be more than a fantastic dream. Now the French must be driven out also. So formidable was the threat of this mountain chieftain that the French found it necessary to send to Africa one of their best soldiers, Marshal Lyautey, with something like 158,000 men. The Rif uprising was finally put down and Abdel Krim was banished from his native mountains.
What surprised all observers and participants in this colonial war was the modern equipment displayed by the Rifians. Even at the final surrender these tribes men were found in possession of 135 cannon, 240 machine-guns, and more than 40,000 rifles.3 Where did these come from ? Some of them were captured from the Spaniards, but that was not the only source of supply. It was shown later that the corruption it the Spanish army was so great that the Spaniards had even sold their own arms to the Rif. More important than either of these sources was widespread gun-running. There are many rumours as to the origin of these contraband arms and the nationality of the gun-runners. It seems well established that French soldiers captured from the Rifians machine-guns ammunition, and even aeroplanes which were obviously of French manufacture, but a discreet silence in official and journalistic quarters stifled comment on this discovery.4
These were great days for French politics and the French armament industry. French influence spread all over Central and Eastern Europe and Creusot waxed strong and hearty together. No longer had M. Schneider to suffer the humiliating rebuffs that were his lot during the Putiloff affair. The adept chicanery that was his salvation in that affair was now employed not in defence but in attack. France rose in power ; and nothing is more evident than that cannon follow the flag.
Schneider had an old acquaintanceship with the famous Skoda works in Bohemia. After the war, the Skoda business languished and its financial structure became endangered. In 1920 Schneider came to the rescue, through the intermediary of a holding company, L’Union Européenne, which was the creature of Schneider’s bank, L’Union Parisienne. Schneider became one of the “ principal participators,” as he phrased it, in Skoda, and he was moved to boast that after completely modernising her industrial processes he enabled Skoda to attain “ an extremely rapid cadence.”5
This cadence became so rapid that within a few years Skoda got control of the motor industry—Laurin-Klement—of Masaryk’s republic, the cable company of Kablo, the aviation concern known as Avia, the power plants of Brno-Donat, and the road construction firm Konstruktiva, and then it overflowed the frontiers of Czechoslovakia. Skoda’s subsidiary in Poland is the arms firm Polskie Zaklady. In Rumania it had another munitions factory, the Ploesti, and in Yugoslavia Skoda reorganised the railroads and participated in the power company of the Central Electric. These were the countries of the Little Entente and Poland, but Skoda did not stop within these limits. It crossed the frontier of political alliances and entered Hungary and became interested financially in the Kreditanstalt of Budapest.6
The scandal growing out of the activities of Skoda’s agent Seletzky (or Zelevski) in Rumania has been noted. Equally devious were Schneider’s dealings in Hungary, a potential enemy of France. The Treaty of Trianon forbade Hungary to arm, yet Schneider had loaned money to Hungary. When the loan fell due, the Magyars could not pay. But the French government could, and so a French official loan was arranged for Hungary. The loan was just enough to cover the Schneider debt, and it was transmitted to Hungary not by the regular channels of the Bank of France but by Schneider’s bank, the Union Parisienne. This was revealed in the Chamber of Deputies by Paul Faure, Socialist deputy from Creusot, at the same time as it became known that Hungary had been able to rearm so well that it could put 300,000 troops in the field at short notice.7
So complex has this manipulation of loans and political alliances behind the scenes become, that the comment of a French journalist, Charles Reber, is rather illuminating. “Schneider and his Skoda, a state within a state, first of all have heavily profited from the conflict between Hungary and the Little Entente, by opposing the Benes plan for a Danubian federation. At that time it was a question of supplying armaments to these small nations. Next, when the crisis appeared, it was the same Schneider and his Skoda which, always in the shadow of Tardieu and Flandin, extorted hundreds of millions from the states in which they operated, shutting off credits in Paris from those which resisted, so that finally, finding it impossible to thaw out their frozen credits, a revised Benes plan was conceived, now called the Tardieu plan, which Schneider had long before projected.”8
Schneider’s and Skoda’s role in aiding Hitler and in rearming Germany are considered elsewhere. From the arms makers’ point of view these were good investments. French friendship with Japan, however, has caused some surprise. The link is not far to seek. On the board of the Franco-Japanese bank is M. Saint Sauveur, a relative of M. Schneider, and the president of this bank at one time was Charles Dumont, once Minister of the Navy. Schneider’s factories have been turning out huge masses of war material for Japan, and perhaps for China also. Pierre Cot, a French journalist, suggests that there was more to these Japanese orders than just the Japanese need for arms and munitions. “ Japan has no need for the material ordered, but she needs the influence of the house of Schneider.”9 Another French journalist points the answer to Cot’s statement when he asks whether there is nothing disturbing about the sympathy that has been aroused by certain French newspapers in behalf of Japanese aggression.10
Indeed there is a connection which explains the extravagant sympathy by French editorial writers for the imperialist ventures of Japan. As previously noted, the leading organs of Paris are controlled by M. Schneider. Le Matin, Le Temps, and Le journal des Debats all take their cue from the French arms maker. Thus orders from Japan to Schneider also insure a favourable press in Paris for the Manchurian expedition of the Japanese.
More important than all this, however, to the French arms merchants, loomed the whole question of disarmament. Obviously it was a menace which must be combated. Here again the press proved useful. L’Echo de Paris is a prominent daily with a vast reading public. Together with Matin, Temps, the Journal des Debats, and the Petit Parisien, it has formed a consortium allied with the powerful and reactionary Havas Agency, the Associated Press of France, to mould public opinion. Through the Echo’s columns recently an appeal was launched for funds for a campaign against disarmament, with the heading “ The Struggle against Disarmament.” On the subscription lists one notices several anonymous contributions of 25,000 francs, 50,000 francs, and 100,000 francs. Who were these modest contributors who did not wish to give their names ? Some hint may be gained from a cynical advertisement opposing disarmament which this paper ran on July 15, 1931, paid for by the S.O.M.U.A. Investigation showed that this is the Société d’Outillage Mécanique et d’Usinage d’Artillerie, an artillery firm connected with Schneider.11
In this campaign against disarmament Geneva has naturally been a salient against which the forces of Schneider and his allies have concentrated—and not in vain. The 1932 session of the disarmament conference was most unsatisfactory for the friends of peace. The reason is not far to seek. On the French delegation the arms merchants had their own spokesman, Charles Dumont, vassal of M. Schneider ; and, inasmuch as his master manufactures submarines, it was not surprising that Dumont insisted on the recognition of the submarine as a legitimate instrument of war—one of the rocks on which the conference foundered. To complete the picture it may be added that Colonel F.G.C. Dawnay, brother of a Vickers director, was among the English delegates. Apparently the arms merchants have adopted the Communist practice of boring from within.12
One thorn remained in Schneider’s side. Paul Faure, Socialist deputy from Creusot, continued his exposures of the arms merchants in the Chamber of Deputies. He it was who read to his colleagues a document emanating from the House of Creusot in which it was recorded that 1,000 kilograms of powder were sent for Mauser gun cartridges to the Mauser firm in Leipzig, Germany, and another shipment to the firm of Paul Capit in Baden. He made some researches into the history of Schneider and regaled the deputies with photographs of Schneider and the German Kaiser on a yacht, of Schneider escorting King Ferdinand of Bulgaria on his inspection trip of the Creusot factories, and other similarly revealing pictures. Under fire now from the representatives of the people, a spokesman for Schneider offered the rather ingenious explanation that the powder shipped into Germany was intended for the Skoda works in Czechoslovakia and had passed through Germany merely “ in transit.” The spokesman did not comment on the photographs.13
Here was a leak that had to be stopped. Foreign governments, foreign industry, French industry, the French press, the French government, even the French disarmament commission were “ fixed.” It remained only to get rid of this Paul Faure. In its early history the House of Schneider had intimidated its workers at the polls and had harvested big majorities for its deputies. Why should it not repeat that performance now ? In 1932, Faure again stood for office in the Creusot constituency and now, by the same old methods of intimidation and influence, he was defeated. Thus one of the most powerful voices raised against the cannon merchants was deprived of its forum.14
It looked as though it was a case of “ Creusot über alles.” Certainly it is on the Continent. Vickers, while still fighting bravely for its place, underwent some reverses—at least for a time. Unlike the French, the British have lent one ear to peace advocates. The practice started with the Washington Naval Conference of 1921, when Charles Evans Hughes proposed that the fleets of Great Britain, the United States, and Japan should be limited in the case of capital ships to the ratio of 5-5-3. The British Stock Exchange, that delicate register of international currents, immediately translated this news into a fall in the prices of Vickers securities.
Vickers appealed to the government, asking if it would submit to these disastrous propositions. After some delay the Admiralty replied that it considered the maintenance of the armament works of Vickers as “ necessary and desirable,” but this resulted only in a temporary rise in Vickers shares on the exchange.15
More heroic measures than encouragement from the Admiralty were needed. Vickers had expanded prodigiously during the war, and England had not arranged for any gradual reduction in the armament business after the Armistice had shut off orders. To save itself Vickers had to launch into other lines of business. It branched out into the construction of railway carriages and electrical equipment. It subscribed more capital and took a factory in Poland for the manufacture of war materials. It even built a shipyard on the Baltic, altered its Italian Terni factory to take care of electrical orders, and took over some mines in Ponserrada, Spain. But the more it struggled the more unwieldy it became.
It was obvious that the electrical and allied enterprises would not supply the expected business, and the depression in Britain had not lifted. Credit allowed to Continental states had been lost through inflation, and it was apparent that Vickers was in extreme danger. A committee of bankers and industrialists set up an investigation of its affairs with a view to reorganisation. The upshot was that assets were revalued and its capital stock was reduced to one-third. It was a painful measure for shareholders, but they faced the possible loss of all their holdings and the result was that Vickers, while taking a smaller place among world trusts, was saved.
It was another one of those cases where peace meant disaster, particularly since Vickers’ great rival, Armstrong, also came to grief. It had attempted to follow Vickers’ lead in embarking on a course of diversification of its products and it was in much worse condition than Vickers. There were reorganisation committees sitting on its fate with the inevitable consultations with bankers, and, as usual, a radical operation was prescribed. Sir Basil Zaharoff appeared from his eyrie on the Mediterranean in one of his last and most shadowy missions. It was said that he put pressure on the banks which held the fate of Armstrong’s in their hands and that they ordered Armstrong’s to combine with Vickers at a huge loss or to take the consequences. The fact is that they did combine, with Vickers getting the lion’s share of the reorganisation and merger.
Perhaps it was this triumphant dénouement of Sir Basil’s career in international finance that inspired Vickers to present him with a golden cup with the following inscription : “ Presented to Sir Basil Zaharoff, G.C.B., G.B.E., by the chairman and directors of Vickers, Ltd., on the completion of fifty years’ connection with the company and as a mark of their great appreciation of the valuable work he has done for them and of their sincere gratitude and high esteem.”
In spite of this distressing picture of both Vickers and Armstrong, the combined company exists to-day in no diminutive form. Its combination in England includes four firms : Vickers-Armstrong, English Steel Corporation, Metropolitan-Cammel, and Vickers (Aviation) Ltd. Its subsidiaries are almost as extensive as the British Empire. There is a Vickers-Ireland, which, during the Irish revolution, is said to have supplied the Irish in their fight against the Black and Tans ; in Canada and New Zealand there are Vickers Corporation and Vickers Ltd.; in Spain are the Sociedad Espanola de Construcción Naval and the Placencia de las Armas company ; in Rumania are the Usines Metallurgiques de Resita and the Copsa-Micu ; and in Poland it has holdings in the Société Polonaise de Materiel de Guerre. In the two last countries-Rumania and Poland-its factories are shared with Schneider-Creusot.16
One of Vickers’ most interesting ramifications is in Germany. After Krupp bowed to the Treaty of Versailles and discontinued the manufacture of arms, he transported part of his armament industry across the border to Holland where he has a factory ; another famous armament manufacturer, Rheinmetall, has a Dutch factory ; and Vickers is interested in both. Vickers is also interested in the Nederlandsche-Engelse Techniese Handelsmij at The Hague and in the Fabrique de Munitions Hollandaise.
More significant is its connection with the Dutch firm of aeroplane makers, Fokker, which is a subsidiary of Pintsch of Berlin. For this Pintsch house, which is ostensibly a manufacturer of gas apparatus, actually produces war material, and English engineers have worked there. But what is even more interesting is that Pintsch is also mentioned as one of the subsidisers of Hitler.
But to proceed with the ramifications of Vickers across the map of Europe and Asia—Vickers have interests in the Swiss firm of Brown-Boveri and in Italy Vickers-Terni supplies Mussolini and through him Hungary. Meanwhile, Sir Herbert Lawrence, director of Vickers, is also director of the Bank of Rumania, a strategic position when arms orders are given out in King Carol’s country. In far-off Japan Vickers has an interest in the Japanese Steel Works, and an English M.P. has accused Vickers of being “ one of the principal supports of the Manchurian conflict.” Thus the old employers of Sir Basil Zaharoff, while suffering reverses for a time, have nevertheless retained their place in the sun.
But what has happened to this Greek spearhead for Vickers’ attack on national sales resistance ? The World War was a splendid climax to his career, the results of years of hard work, and he was proud of his achievements. However, the fatal hybris of his people visited Zaharoff, now by grace of King George, Sir Basil Zaharoff, Knight of the Bath. Decked with orders and decorations like a Mexican general, and his purse flowing with the prodigious profits of the war, he apparently felt that he could indulge himself in some less directly commercial activities. Even when retailing submarines to the Turks, the Greek had doubtless felt the twinges of patriotism, and now that he was powerful, now that his political friends were in the saddle and his native land under the rule of the iron Venizelos, he foresaw a Greater Greece at the expense of a defeated Turkey.17
He became the angel for the Greek war of expansion in Anatolia. Indeed, Mr. Lloyd George gave him the British benediction and Clemenceau did not raise opposition. He put up some £4,000,000 for the support of the Greek army, and if it had not been for unexpected French antagonism—the power of Clemenceau was waning—and a sudden revolution in Athens against Venizelos, he would possibly have seen his dream come true. But the Greek statesman fell ; the Turks, armed with French cannon, defeated the Greek forces, and, worst of all, Lloyd George failed him.
As the Greek army streamed dejectedly back over Asia Minor, severe attacks were made against the alliance between the famous Zaharoff and the Welsh politician. The war-weary British public asked why Lloyd George was so willing to drag their countrymen into such an uninteresting land, and Mr. Walter Guinness, M.P., hinted that the Greek was “ the power behind the throne.” Englishmen decided that no munitions maker could dictate policies to their premier and the government of Lloyd George had to resign.
It was the end of Lloyd George’s power in English politics and it was the end of Sir Basil’s prestige in the chancelleries of Europe. By departing from the impartial international code of the arms merchants, this great exponent of the code went down to defeat. He still, however, had one realm over which he could rule supreme. His friend Clemenceau had arranged that the principality of Monaco should be free of French interference, and Zaharoff obtained a controlling interest in the Casino at Monte Carlo. He married the Duchess of Villafranca, one of the royal Bourbon house of Spain, and settled down as potentate over roulette and baccarat.
One year later his bride died and Zaharoff retired from the Casino. He retired also from active business and politics. His Vickers shares had caused him heavy losses, but his oil holdings were so large that he was still tremendously wealthy. And he is still the man of mystery. Every now and then the wires are agitated with reports of his death—for he is now over eighty years old. More interesting are rumours that he has written his memoirs. Finally, the announcement that he had founded a hospital at Biarritz for war-wounded will no doubt furnish excellent material to the cynical—and to others.
Zaharoff in retirement, Vickers just saved from bankruptcy, and Krupp put out of business by the Treaty of Versailles—in many ways this seems like a true Götterdämmerung of the arms merchants. But it did not last long. Vickers survived and showed signs of recovery. And even Krupp has made a singular resur rection. Krupp’s great cannon factories had been forbidden, by the terms of the Versailles treaty, to make arms. Reorganised Vickers and triumphant Schneider might continue the merry game of selling to their countries’ friends and enemies, but legally Krupp and his German corpsbrüder could not participate. Indeed, Krupp’s suit against Vickers for the royalties of his grenade fuse looked as though the old business man had decided to balance his books and to close out his accounts in arms once and for all. But not for long.
Krupp had to go out of the arms business—in Germany. But there was no stipulation in the treaty about foraging through the intermediary of other countries. In Sweden there is Bofors. Bofors is more than a firm ; it is a country, just as Essen used to be almost a sovereign state, just as Creusot is to-day. But Krupp obtained an important block of shares in Bofors, and Bofors employs his patents. Moreover, there have been charges that the ubiquitous Schneider has attempted to acquire a share in this company. Thus while King Gustav, most pacific of European monarchs, rules in Stockholm, and while the countrymen of Alfred Nobel award the famous Peace Prize, in their very midst shells are being timed, guns bored, and grenades manufactured by a new consortium of arms merchants.18
So the new world which was to arise out of the ashes of the World War turned out to be very much like the old. Political and territorial disputes still continued, nationalism went on unabated, and the peace treaties, having sown dragon teeth, produced a huge crop of bitter fighting men. It seemed in many ways an even better world for the arms merchant than that preceding the war. Adjustments had to be made, to be sure, because the volume of business created by the war could not be maintained in times of peace. But the future, on the whole, looked bright. The greatest menace was the growing demand all over the world for disarmament. The insistent cry of the peace forces, of labour, and of the common people groaning under the burden of taxation, forced the governments to call international conferences at which world disarmament was discussed. Should these conferences succeed, the business of the arms merchants would certainly suffer. But the arms manufacturers were equal to this emergency.
1 Francis Delaisi, “ Corruption in Armaments,” Living Age, September, 1931.
2 Francis Delaisi, ibid.
3 Walter B. Harris, France, Spain, and the Rif, pp. 246, 321.
4 Georges Hoog, " L’Acier contre la Paix," Living Age, November, 1932, pp. 198-204.
5 Charles Reber, " Puissance de la Skoda et son Trust," Le Monde, April 22, 1933.
6 Reber, ibid.
7 Paul Faure, Les Marchands de Canons contre la Paix.
8 Reber, op. cit.
9 La République, February 21, 1932.
10 Georges Hoog, op. cit.
11 The Secret International, p. 22.
12 The Secret International, p. 16.
13 Paul Faure, op. cit. ; Allard, in Les Annales, April 14, 1933.
14 The Secret International, p. 21.
15 Allard in Les Annales, April 14, 1933.
16 Charles Reber, " Multiple Puissance de Vickers," Le Monde, April 29, 1933.
17 Lewinsohn, The Mystery Man of Europe, Chap. 8; Mennevée, Sir Basil Zaharoff.
18 Allard in Les Annales, April 14, 1933.