The Hundred Years'Peace [ H[
which had become the only supranational link between political gov-
ernment and industrial effort in a swiftly growing world economy. In
the last resort, their independence sprang from the needs of the time
which demanded a sovereign agent commanding the confidence of
national statesmen and of the international investor alike; it was to
this vital need that the metaphysical extraterritoriality of a Jewish
bankers' dynasty domiciled in the capitals of Europe provided an al-
most perfect solution. They were anything but pacifists; they had
made their fortune in the financing of wars; they were impervious to
moral consideration; they had no objection to any number of minor,
short, or localized wars. But their business would be impaired if a gen-
eral war between the Great Powers should interfere with the monetary
foundations of the system. By the logic of facts it fell to them to main-
tain the requisites of general peace in the midst of the revolutionary
transformation to which the peoples of the planet were subject.
Organizationally, haute finance was the nucleus of one of the most
complex institutions the history of man has produced. Transitory
though it was, it compared in catholicity, in the profusion of forms
and instruments, only with the whole of human pursuits in industry
and trade of which it became in some sort the mirror and counterpart.
Besides the international center, haute finance proper, there were some
half-dozen national centers hiving around their banks of issue and
stock exchanges. Also, international banking was not restricted to the
financing of governments, their adventures in war and peace; it com-
prised foreign investment in industry, public utilities, and banks, as
well as long-term loans to public and private corporations abroad. Na-
tional finance again was a microcosm. England alone counted half a
hundred different types of banks; France's and Germany's banking or-
ganization, too, was specific; and in each of these countries the prac-
tices of the Treasury and its relations to private finance varied in the
most striking, and, often, as to detail, most subtle way. The money
market dealt with a multitude of commercial bills, overseas accep-
tances, pure financial bills, as well as call money and other stockbro-
kers' facilities. The pattern was checkered by an infinite variety of na-
tional groups and personalities, each with its peculiar type of prestige
and standing, authority and loyalty, its assets of money and contact, of
patronage and social aura.
Haute finance was not designed as an instrument of peace; this
function fell to it by accident, as historians would say, while the sociol-
[ 12 ] The Great Transformation
ogist might prefer to call it the law of availability The motive of haute
finance was gain; to attain it, it was necessary to keep in with the gov-
ernments whose end was power and conquest. We may safely neglect
at this stage the distinction between political and economic power, be-
tween economic and political purposes on the part of the govern-
ments; in effect, it was the characteristic of the nation-states in this pe-
riod that such a distinction had but little reality, for whatever their
aims, the governments strove to achieve them through the use and in-
crease of national power. The organization and personnel ofhaute fi-
nance, on the other hand, was international, yet not, on that account,
independent of national organization. For haute finance as an activat-
ing center of bankers' participation in syndicates and consortia, in-
vestment groups, foreign loans, financial controls, or other transac-
tions of an ambitious scope, was bound to seek the cooperation of
national banking, national capital, national finance. Though national
finance, as a rule, was less subservient to government than national in-
dustry, it was still sufficiently so to make international finance eager to
keep in touch with the governments themselves. Yet to the degree to
which—in virtue of its position and personnel, its private fortune and
affiliations—it was actually independent of any single government, it
was able to serve a new interest, that had no specific organ of its own,
for the service of which no other institution happened to be available,
and which was nevertheless of vital importance to the community:
namely, peace. Not peace at all cost, not even peace at the price of any
ingredient of independence, sovereignty, vested glory, or future aspi-
rations of the Powers concerned, but nevertheless peace, if it was possi-
ble to attain it without such sacrifice.
Not otherwise. Power had precedence over profit. However closely
their realms interpenetrated, ultimately it was war that laid down the
law to business. Since 1870 France and Germany, for example, were
enemies. This did not exclude noncommittal transactions between
them. Occasional banking syndicates were formed for transitory pur-
poses; there was private participation by German investment banks in
enterprises over the border which did not appear in the balance sheets;
in the short-term loan market there was a discounting of bills of ex-
change and a granting of short-term loans on collateral and commer-
cial papers on the part of French banks; there was direct investment as
in the case of the marriage of iron and coke, or of Thyssen's plant in
Normandy, but such investments were restricted to definite areas in
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