THE BRODIE-STONEMAN REPORT 1933

The next day Edward E. Brodie sends his dispatch No. 627 from Finland titled “Experiences in Russia of William H. Stoneman, a correspondent of the Chicago Daily News”. Brodie is alerted that “economic conditions are worse than a year ago”. Stoneman passed through Helsingfors on the southern coast of Finland across the straits from Tallinn on February 23 after his first trip to Soviet Russia. He stays on for six weeks “most of the time being spent at Moscow”. Brodie reports that Stoneman personally confirms to the highest ranking diplomat here the authenticity of information published in his stories of “about 40,000 words”. Why Stoneman gives this information to the American diplomat is not precisely clear.

During the Holodomor and in general there is an odd complicity between journalists and diplomats. An exchange of favor can be quite the standard practice when serving the same masters of the ruling class. Its convenient to swop stories, pick up tips, trade info and of course share a good chat with a friend ready to fire home a story by cable or expedite by diplomatic pouch. Fellow Americans facing the same drama share different degrees of bewilderment or surprise not quite sure what world they are living in although in tragedy it may feel to be the same. Could it be that they both feel shock and awe, anger or sadness? Even in the marble stone halls of power one could never be too sure about anything real or solid. Stoneman “promised” to send Brodie his “impressions” after he returns to his base in Stockholm. For a moment they share a bond of horror and perhaps to remind them that a touch of compassion elevates life as human and dignified.

Who is Ed Brodie and how did he end up in Finland monitoring the Russians? A non-career appointee he savored the pleasures of Bangkok in his first posting in late 1921 to Siam (Thailand), the ancient Royal Kingdom until May 1925. Four years in that tranquil idyllic tropical paradise of other worldly peace. Five years later, in May 1930, Brodie returns to State as ambassador to Finland. Brodie is actually a newspaper owner and publisher from Oregon City, born in Fort Stevens in 1876, the year of the Custer Indian battle when the state was mostly wild frontier and Indian warrior chief Red Hawk and his brave brothers roamed the plains. Brodie is also a Free Mason, 32 AASR and Shriner, one of William R. Deslow’s “10,000 Famous Masons” mentioned in his book with a forward by future President Harry S. Truman, himself a PGM, Grand Lodge of Missouri.

Brodie remains at his post in Finland until September 1933 with the Holodomor scorching the life out of millions of Ukrainians. Stoneman’s info to the American State Department reads like a military intelligence report. “Mr. Stoneman,” Brodie observes, “found among the non-official class a belief that Russia is living under a certainty of aggression from her neighbors, both to the west and to the east. They are suspicious of the intentions of Poland and Rumania, but believe that Japan will not attempt an unfriendly movement which might lead to rupture as long as Japanese are fully occupied in their present imbroglio with China. The immediate fear of trouble comes from the southwest and accordingly Russia has concentrated in the Black Sea most of the principal vessels of her fleet. My informant said that some officials with whom he had talked about the idea of conflict, but it is noticeable that Russia is attempting to add to her military equipment and is manufacturing tanks at one of the tractor factories. According to information given to Mr. Stoneman by American engineers, the steel manufactured in Russia is very inferior and would not be usable as steel in the United States. He also said that efforts are being made to develop the manufacture of gas for military use, but for that purpose natural deposits are not extensive. Mr. Stoneman believes that the Russians are long on human resources, but seriously lacking in equipment as well as transportation, and that she is ill-prepared for modern warfare.”

Stoneman turns to the food crisis; there are mounting signs of food scarcity. In his dispatch forwarded to the Secretary of State Brodie explains, “There exists a food shortage in certain districts, but not so noticeable in Moscow, and there is even in some areas an insufficient amount of cabbage, long a principal item in the diet of the Russian masses.” Brodie adds a personal note telling how even the diplomats have trouble finding foodstuffs from the countryside: “I was informed last night by Mrs. Sperling, wife of the British minister, that their Embassy at Moscow had asked the Legation here to ship fresh eggs to the Soviet capital, as that commodity is not obtainable here.”

“Whatever the hardships suffered by the adult population, except the favored classes, Mr. Stoneman was particularly impressed by the appearance of the children, who are comfortably clothed and are very well fed, receiving both milk and meat in the schools. The authorities are taking no chances with the physical development of the younger generation.” Stoneman’s reports are toned down, non-alarmist; he needs a return visa to reenter the U.S.S.R.. Who can be trusted? The next day Brodie sends another dispatch of Stoneman’s findings on local shortages of the food supply in the countryside as he ends his first tour in Russia. (Living Conditions 861.5017 / 431; Edward Brodie to US Secretary of State, Feb. 24, 1932, SDDF 761.00/221)

Around this time from London The New York Times reports March 28 that “N. M. Victor Rothschild , twenty-one-year-old nephew of Baron Rothschild is going to the United States soon to take a post with JP Morgan & Co. it was learned tonight.” The Times enlightens its readers that, “It is usual for progressive British bankers to send their young men to western states temporarily, one of the most notable believers in the practice being the Anglo-American banking house of J. Henry Schroeder & Co.” When seen from the historical perspective of the Rothschild relation with the Morgan firm Eustace Mullins reminds us (The World Order) this Morgan-Rothschild connection “explains the otherwise incomprehensible mystery of why JP Morgan famed as “the most powerful banker in the world”, yet who left such a modest fortune at his death in 1913, a mere $11 million ($110 million) after his debts were secured. Although the present members of the Morgan family seem financially secure, none of them is counted among the ‘big rich’.” The rich are very careful at matters of privacy; it would seem here the shadow over the legacy is greater than the man who leaves it behind. (E. Mullins, The World Order)

Consul Carlson on April 14 sends dispatch No. 14, a translation of an article from Balt Noewspaper Revalsche Zeitung, a German-language paper in Tallinn titled “Letter from Moscow” published April 8. The story covers “growing discontent in Russia at the living conditions”. Harry Carlson wants everyone to see this one. Copies of the story are passed on to Riga, Paris (EIC) and Washington. “A comparison of the situation of the average individual in the Soviet Union in the year 1928 with that of the present time shows that, although even at the beginning of the Five Year Plan the population had to suffer because of difficult living conditions, nevertheless the situation at that time appears to be almost paradisaical in comparison with that of today.” Moscow remained “an exception” where the populace received “their rations of bread with comparatively great regularity”. However, “the meat, milk, and butter provisioning of this city is completely disorganized” the privileged now could barely butter, and only rarely “fish, game and even poultry are offered for sale”. Moscow is not yet starving but it is living in great need.” (italics added)

Conditions for famine are stacking up State Department files. Carlson is experienced with famine and relief. He definitely is not happy with the Russian mess. This Tallinn story went on: “The situation in the country districts is entirely different. A steady flow of hungry people is under way towards Moscow. In all of the streets of Moscow typical peasant types are to be observed; there are men in Russian coats, whose feet are covered with felt boots and sometimes with rags. When these people are asked as to the places from whence they come they reply that they are from the districts of Orolow, Tula, or from Ryazan. They say that they are former ‘kulaks’ from whom everything has been taken and that they have come into the city in order not to starve in the country. In this way the population of Moscow increases daily and an army of unemployed is being formed the number of which is not to be estimated, and concerning which no statistics whatsoever are available.”

Peasants are now permitted to retail foodstuffs in the city markets. If only they had anything left! Their livestock and seed have been confiscated. Carlson’s report makes that clear. “But what kind of food products! Small, dirty, unappetizing lumps of butter are offered for sale at ridiculous prices; sometimes milk can be seen, but the prices which are asked are impossible. Some weeks ago the Central Committee of the Communist Party issued an order according to which peasants who are members of the ‘Kolkhoze’ are each given the right to own one cow, and a few smaller animals. This decree came at a period when the last cow, the last sheep and the last pig had already been taken from these unhappy peasants. For this reason it was scarcely of practical importance.”

But now the repression not only has the kulaks fleeing the villages targets of Moscow’s latest round of violent state suppression but it is “extended to all classes of the country population”. The report continues to depict the current scene. “The accounts of such fugitives from the country are pitiful. They relate how their stalls were broken into and how all their cattle was nationalized upon the order of the village Soviets. When the Soviet Government undertook its great campaign for the collectivization of agricultural enterprises it was believed in Soviet circles that in this manner the ‘kulak’, the well-to-do farmer, would be ruined and that he would then willingly accept work in the ‘Kolkhozes’ since in this manner the standard of living would be advanced. Through bureaucratic management, irrational cultivation of ground, and entirely insufficient care of cattle in the ‘Kolkhozes’ and “Sovhozes’, people are starving in the country districts. (emphasis added) Even the miserable effects which belonged to the poorest classes in the villages before the collectivization have been taken away, and the hatred against the Soviet regime which was borne formerly only by the well-to-do circles of the peasants has now been extended to all classes of the country population. The treatment of collectivized cattle is beyond all description. There are, of course, no stalls available in which to house the herds which have been collected in this manner. In the Steppe regions of South Russia recourse has been taken to a method by which the cattle are simply herded together and kept in the open air in fenced areas. Feeding takes place, of course, quite irregularly; it often happens that cattle break out of these areas and escape into the steppes. These completely senseless measures have quite naturally awakened extreme bitterness among the peasants. Of late the Kolkhozes have begun slaughtering cattle in great numbers, simply because of scarcity of feeding materials. Numerous sharp decrees to prevent this are in existence.”

The Tallinn journalist writes that war alone could reverse the slide into chaos and an end to the Stalinist communist dictatorship. “The only refuge which the great mass of the Russian population sees is war. Only a war can bring about a change of conditions, and only a war can give hope for a new regime. When it seemed that difficulties between Japan and the Soviet Union in the Far East were unavoidable, the USSR reserve towards Japan was explained by the Soviets by stating that it was impossible to engage in war against Japan until the Five Year Plan had been completed. In reality matters afraid of losing in case of war their control over the masses, which at the present time are still dozing in an inactive stupor”. Stalin was rumored to be ill, but seen at Easter’s “performance of the Great Opera”. (SDDF 861.00/11493)

US observers watching Ukraine’s borders caught wind of a mass exodus of 1,000 Moldavian peasants from the Soviet Moldavian Republic into Rumania featured in dispatch No. 854 from Charles S. Wilson on March 12, 1932: “fleeing collectivization, and confiscation of the livestock and property, denied right to religious assembly and many sent to forced labor camps”. Conditions were desperate Charles Wilson note, and he writes, “Rather than continue to suffer such persecution, they preferred to run the risk of being shot by the Soviet guards during an attempted flight to Rumanian territory… The escape of 1,000 persons who will tell the truth about conditions in their own area is a bitter blow to the Soviets who had been broadcasting across the frontier glowing accounts of the Utopian conditions prevailing on the other side of the Dniester.” (SDDF 861.48/ Refugees 71/2, reel 31)

On April 7, 1932, dispatch No. 1029, a “Special Report from France”, is sent by Warrington Dawson, a so-called “Special Assistant” actually doing political intelligence in the Paris Embassy covering Soviet Russia and the émigré press from Paris, an incestuous nest of Czarist and Soviet spies. It includes an expose titled “Commercial Relations with the Soviets”, with an article by Joakim Puhk, the President of Estonian Chamber of Commerce, and also published in Paris by the Revue de Paris, on April 1 1932 with a look at the Five-Year Plan and Soviet intention to disorganize world trade “behind a hedge of bayonets and scaffolds”. “What matters is,” Puhk declares, “that world markets are being disorganized, and that the capitalist States, are learning that Russia is in a position to being down prices and to disorganize production in capitalistic countries while rendering it more difficult for them to sell their products and increasing unemployment within their borders. That is the explanation of the dumping policy, even though it means degradation of the Russian people themselves.” All of which was denied by Molotov and other Soviet leaders, of course, as anti-Soviet propaganda. Russians he says are “reduced to the level of half slaves or cattle to which Russian workmen and peasants have been reduced. The laborers who are fulfilling the Five-Year Plan sleep without beds in common barracks where they lie flat on the ground, lacking even a change of clothes. Men and women do not always even sleep apart. Wages are paid in kind but in such reduced proportions that the workmen cannot really live on them. Nothing whatever remains, of course, for his pleasures or intellectual needs. Yet his labor-card binds him like a slave to the enterprise in which he is engaged. He has not even the freedom to move from one place to another, and the remuneration is such that only complete slaves in other countries can enter into competition.” (SDDF 661.0011/22)

The idea to send Bullitt as ambassador to Moscow came later that year, an afterthought by House. There really was nobody else to go except John MacMurray. Bullitt wormed his way into the job which proved useful to FDR who never expected Bullitt to accomplish much in Moscow. Brash and audacious, Bullitt is also deviously cunning, and adept at fancies of charm so much so that at first he genuinely enjoyed sporting in the medieval antics of the blood-stained Bolsheviks. Bullitt’s reputation precedes him there. The Bolsheviks know him. He had met Radek, Lenin, Chicherin and Trotsky in more revolutionary times.

Bullitt considers the wily Litvinov to be someone he can readily approach since his first days with Lincoln Steffens in Bolshevik Russia on the 1919 House mission. Not that he could ever count on a straight answer. Now he is again going back into another giant famine.

Bullitt travels to Moscow arriving May 21. His business ostensibly is debts and loans, credits for the Kremlin perhaps, but he has no special mission for Stalin. Stimson would never use him that way. Bullitt never shows any concern for the peasants on this trip. Famine and starvation are not his priorities. He is there ostensibly to intervene on behalf of negotiations for National City. More smoke and mirrors. It’s a Consortium deal and he’s only a bit player. He would fail. Stalin may have been a little curious but he has much more on his mind like losing the Ukraine. Nevertheless, the Consortium still intended on making use of him. In two years a similar trick will turn on Bullitt when he has to take the full brunt of the President’s “gentleman’s agreement” with the Soviet Foreign Minister Litvinov when FDR puts the recognition deal on the table in the White House. All this would haunt Bullitt during his brief two years as as ambassador in Moscow completely exhausting the credit of his “Sovietphile” reputation making his presence there redundant and suddenly an all-too conspicuous embarrassment for Roosevelt bungling the Consortium’s long-term industrial business plans for Soviet rearmament and war. The reason for war is war. Peace begets peace; war begets war. Somehow that message eluded Bullitt who used up his valuable time in Moscow mainly in pointless debates with the expert dialectician Soviet Foreign Affairs Commissar Maxim Litvinov to pay off National City’s Czarist debts.

Apparently on this particular mission Bullitt is not working under a directive from FDR. They are neither friends nor social acquaintances. As Governor of New York, FDR could hardly have been more indifferent about the City’s loan. Roosevelt didn’t see him or send him. Nor did House. Nor Baruch. National City men inside the State Department sent him. Bullitt was good at role-playing and liked to let everyone know how mysteriously important he is ever since playing special agent to Lenin in 1919. Then, upon his return to London, House disowned him and President Wilson and Prime Minister Lloyd George refuse to see him or personally acknowledge his mission. At Yale’s “Dramat” he enjoys acting, but he is never nearly as good as Cole Porter or Monty Woolley. Bullitt had tried journalism but wasn’t content with that side of the Game though he had learned a lot from his close friend Lincoln Steffens ever since their mission together two years after Steffens traveled with Trotsky to help in the set up of the Bolshevik regime in the October 1917 coup Bullitt played his card in 1919 and another now in 1932 using his connections at State.

Bullitt was transfixed, fascinated by the intrigue of and the power of government and social status and uses it like others in the Consortium of American society to confirm one’s self-importance veiled in unaccountable secrecy and mystery. Since childhood Bullitt had dreamed to be a consummate statesman. Actors with top-hats. Bullitt, however, is no match for Lenin, Stalin or the Bolshevik diplomats. For this mission Bullitt cultivated the producers of the real-life stage, House, Baruch, and his social class of rich and powerful friends at State where ambassadorships went to the Consortium big wigs, pooh bahs and other panjandrums, Dems and Republicans who themselves could afford to pay the entertainment expenses of keeping up an embassy in the diplomatic crowd. The State Department leaves them with a shoe-lace budget. Ambassadors have to buy or ship their own cars. Most walk to work. Salaries are small, $17,500 for an ambassador and even that is frozen during the depression years. Bullitt knows how to stroke feathers for favors.

So, in 1932, during a critical election year with the national economy in the malestorm of its worst banking crisis in the history of the nation, Bullitt plays at politics and used the Moscow trip for National City’s account to ingratiate himself into FDR’s private entourage eventually even going so far as to seduce the passion of the President’s personal Secretary enticing her to travel across the world to Moscow only to be rejected and cast aside. When it ca,e time, he knew he would serve FDR at the President’s pleasure. At first, newly installed in the White House, FDR is amused and suffers him gladly. Before the end of the decade he will cut the line.

But at this time in the early thirties more likely it is Colonel House, the shadowy presidential advisor and said to be a Rothschild man intervenes to move Bullitt a step closer to the apex. Power has no conscience; it knows and wants only more power and compels the actor to do what is necessary to take it, as much and whenever the occasion avails itself through people, events and situations. Consequently Bullitt arranges to be hired as a “Special Assistant” in Stimson’s State Department. It was a pure Consortium job, sending the famous Bolshevik apologist on a clandestine mission ostensibly to collect bad debts. The Consortium uses people like Bullitt until they are no longer needed. Stimson nor Hoover have no use for him. Stimson never liked him, considering him arrogant, a social gadfly flamboyantly disloyal and not a team player. In fact, when Bullitt gives his “club and donkey” speech and raised his warning against Stalin’s intention to turn Europe Red, Stimson becomes irate; FDR doesn’t agree with Bullitt’s method of diplomatic “cajolery and coercion”, declaring “it wouldn’t work” and that “The Soviets wouldn’t take it.” Stimson records in his diary “I realize what a preposterous thing it was for me to have my time taken up with this wretched, selfish, disloyal man’s troubles. He has gotten into this mess himself by virtually being disloyal to his chief.” The very experienced and very wealthy Bill Phillips (he married the Astor girl) has no place in his heart for Bullitt either. Hull had no opinion nor did his matter anyway. (M.Cassella-Blackburn, 215, HLS Diary)

Japanese aggression expands their hold on territory in China and tensions are high on the South Eastern Russian border with the Kremlin still holding onto territory around their railroad there. The Manchurian crisis was an episode of the vital importance for the League weakened by its failure to enforce international collective security agreements and treaties. Godfrey Hodgson writes, “It taught a lesson that was learned by the dictators before the democracies absorbed it: that only force could stop a nation or a leader who was willing to use force and use it ruthlessly. It showed beyond a doubt that the Japanese were determined to conquer China and such other territories as would give them the markets and the raw materials they believed they needed.” So far he has failed to restrain Japanese aggression in the Far East.

In a few short months in early September Stimson shares his vision for a future role of US in China with Admiral Hepburn, US Pacific Fleet Commander, to confront he says the “underlying danger in the Far East and the absolute necessity of keeping the Navy in such a condition in which it would be airtight against any sudden attack by the Japanese”. Stimson is now pitiless in his judgment of the League of Nations in general and the wretched political shuffling of the British appeasement clique, and Sir John Simon in particular. In private he said he was “disgusted”. Stimson calls the leaders of the League in general “damn mushy cowards”. He singled Simon out for “weasling”. Not a young man Stimson admits he has always felt a soldier at heart. When a world is preparing for war a lawyer not believing in the binding force of international treaties has nothing to gain in standing out as a paper tiger. (G. Hodgson, 167-8; HLS Diary)

Around this time Undersecretary Joe Cotton tells his close friend and boss Stimson “that a team of code-breakers in New York, picturesquely known as the “Black Chamber”, was deciphering and reading incoming messages for foreign ambassadors in Washington.” Stimson finds it dubious and blasphemously incredible that as early as the 1922 Naval Conference “the American delegates were presented every morning with the instructions sent to the British, French, Japanese and Italian delegates they were negotiating with. The code-breakers are controlled by the War Department’s Division of Military Information, but Stimson discovers to his consternation that the State Department had allotted $40,000 a year to Black Chamber, a huge sum when salaries are miniscule. That was in 1929 when Stimson shuts down the Cipher Bureau.

Stimson notes in his diary June 22, 1931 that the eves-dropping was “a highly unethical thing”, and he tries to end it. “Gentlemen do not read each other’s mail”, declaring the practice underhanded and unclean and not suited to his profession as a lawyer and diplomat. Stimson cuts the funding. Black Chamber leader cryptanalyst Herbert O. Yardley is fired. Yardley then writes his whistle-blower book, The American Black Chamber, published that year 1931. It becomes an instant best-seller in Japan where its leaders learn how they had been “tricked” ten years before at the Naval Conference negotiations and duped into conceding naval superiority. The Japs change their codes. The US Army gets into the picture, setting up its own operations in the Signal Corps in the office of the Chief Signal Officer, and David Friedman, a brilliant emigrant Russian from Bessarabia whose parents escaped anti-Semitism there to settle in Pennsylvania, and changed his name to from Wolf to William. Friedman works with Yardley cracking the Japanese Purple cipher thus disclosing Japanese diplomatic secrets long knowing long before Pearl Harbor Japanese war plans. Among the new cryptanalysts Friedman is a legend; they all studied his book, Elements of Cryptanalysis, and regarded it as “our Bible”, expert codebreaker Joe Rochefort recalled. Friedman first learns about cryptography reading “The Gold Bug”, by Edgar Allan Poe, my favorite writer when I was ten. Just imagine that, a penniless and persecuted emigrant Russian Jew saves America. And he never got the Medal of Freedom. (M. Bundy, On Active Service, 188; G. Hodgson, The Colonel, 203; Shawn J. Rosenheim, The Cryptographic Imagination Johns Hopkins Univ. Press, 1997,11; Ronald W. Clark, The Man Who Broke Purple: the Life of Colonel William F. Friedman, Who Deciphered the Japanese Code in World War II, Boston: Little Brown, 1997; David Kahn, The Codebreakers: the Story of Secret Writing. London: Weidenfeld and Nicolson, 1966; Frank B. Rowlett, The Story of Magic: Memoirs of an American Cryptologic Pioneer, Aegean Park Press, 1999; P. K O’Donnell writes Hoover and Stimson received Black Chamber intercepts in 1929 provoking the shutdown, and he adds, “Fortunately, the military pressed on with code-breaking efforts.” , xi ; re “Black Chamber” W. Friedman, Elliott Carlson, Joe Rochefort’s War, The Odyssey of the Codebreaker Who Outwitted Yamamoto at Midway, Annapolis, MD: Naval Institute Press, 2011, 55; Leo Marks, Between Silk and Cyanide, A Codemaker’s War 1941-1945, NY: The Free Press/Simon & Schuster, 1998)

The debt problem is all getting out of hand. He and Ogden Mills persuade England not to default in December. On November 30, 1932, Stimson tells Hoover “the time had come when somebody has got to show some guts.” Hodgson confirms, “Right up to the eve of Pearl Harbor, as we shall see, a body of opinion in the United States powerful enough to compel the most gingerly respect even from such a master politician as Franklin D. Roosevelt angrily denounced any suggestion that the United States should, in its own interests, act to prevent Europe from being dragged into war for a second time under the weight of its ancient rivalries, and its new economic quarrels. Henry Stimson believed, as early as 1931, if not before, that America and Europe were inextricably entangled, whether anyone liked it or not. What is self-evident he doesn’t feel the need to admit that the Americans would need the Russians. They are already there constructing colossal dual capacity manufacturing plants and armament factories with the latest American machine technology to modernize Soviet defense capability. (G. Hodgson, 170)

May 27 Stimson notes, “Lamont is very much worried…he thinks there will surely be a crash during the summer which will upset all that they are doing here and destroy confidence in this country… He is a little bit easier on the Germans than I would be. He thinks they ought to get a moratorium from three to five years and then only have to pay perhaps a hundred million dollars, and then do it only on the basis of some index of prosperity, so that their obligation would be in the nature of an income bond. On the other hand, Parker Gilbert* is stiffer against the Germans. He has had pretty good experience with them, and he thinks they can pay now, and that under different treatment they would do it. In this respect I agreed with him. I had the experience of studying the Germans at close hand last year when I went to Berlin and when I was in the London Seven Power Conference. I feel very confident that the more we put into them in the way of firmness, the more quickly will they realize that is their only chance. In other words, the germ as I see it is to get Germany, first, to promise sometime, not necessarily at once, to pay something. In order to do that, we have got to change the British position.” Stimson found the British “egging the Germans on in the hope of a cancellation”. No reference here to the USSR.

Let us reader take a quick look at the distinguished Mr. Gilbert: Seymour Parker Gilbert (1892-38), banker, lawyer, politician, diplomat, all the right ingredients for the Consortium. Rutgers, Harvard Law; at 27, Gilbert lands a top slot as undersecretary at Treasury in Wilson’s administration during the first years of the Fed under McAdoo and stays on during the war years and Harding’s administration. Gilbert was deep into the postwar reconstruction of Germany as Agent General for Reparations to Germany (1924-30) and appointed by the Allied Reparations Commission, succeeding Owen D. Young. The Young Plan originally conceived the Bank for International Settlements (BIS). Gilbert had been responsible for implementing the doomed Dawes Plan which bought Germany to its knees compelling Hoover to impose his moratorium on debts and reparations and driving the German people over the brink and Hitler into power. Rewarding all he has done taking the world closer to what author Ian Buruma describes in Year Zero 1945 (2013) as the worst conflict in the history of the world, by 1931 Gilbert officially makes partner at JP Morgan; during the yuppie 1980s of arbitrage mega-mergers Gilbert’s son chairs Morgan Stanley. A quaint sense of continuity of the victors, reader, is it not so? (Ian Buruma, Year Zero 1945: A History of 1945, NY: Penguin Press, 2013)

June 8. On the position of cancellation of war debts by the British Treasury (“Atherton’s talk with Sir Warren Fischer”) Hoover tells Stimson “that he could not be expected after he was spending every day in turning down hundreds of requests from Congress to appropriate various sums of money for Americans to turn around and give away $250,000,000 a year to foreigners. The American people simply could not understand it.” Hoover said the Europeans could pay. How much? “Perhaps the whole”, he said. June 28, Tom Lamont of Morgan calls Stimson to tell him “in both Argentina and Germany the British were urging the respective countries to default on their sinking fund payments on the long term bonds.” Stimson notes “This is contrary to the policy of JP Morgan & Co., who always urge that government bonds take precedence over private indebtedness.” The British worry they’d might default “on their private obligations” ;Lamont tells Stimson “the British were doing it in good faith as the lesser evil”. Lamont urges Stimson to push Hoover “to take the lead again.” On June 29 Stimson notes in his diary, “The President said that the financial situation had gotten as bad as it possible could be. Hoarding has begun again and some $200,000,000 is being withdrawn from circulation every week. That is equal to the very peak of the bad times last fall. … Roosevelt is very likely now to be the nominee…” The tide has turned against Hoover. (HLS Diary)

This summer on the sea off Newport, Rhodes Island Roosevelt takes a break from the campaign trail cruising on William Astor’s grand yacht Nourmahal with his Consortium guests watching the big pretty boats compete in the 15th America’s Cup races. It’s the nation’s premier sporting event of the rich with their J-Class yachts. Bullitt’s friend Harold (“Mike”) Vanderbilt is at the helm of Rainbow against T.O.M’s Sopwith’s Endeavour. Roosevelt has been a member of the New York Yacht Club since 1904. It was said by his family that “the sea coursed through his veins”. Not a very good year for the billionaire’s big yachts of shipyards of the unemployed who depended on wealthy shipowners for their bread and butter. Stimson’s loyal and beloved daughter Candance (she never marries) may have been watching too, as America’s premier yacht racing woman skipper who sailed across a stormy transatlantic race in the 1905 Kaiser Cup, one for the record books.

More inquiries from US citizens and others seek assistance from the State Department. Desperate relatives are at a loss how to safely send urgently needed foodstuffs and money to family relatives and friends in the US. Kelley generally replied with a standard official format. “I have to inform you,” Kelley wrote in his letter written June 3, 1932 to F. W. Gertner of Westbrook, Minnesota, “that his Government does not maintain in Russia any representatives or stores. The Am-Derutra Transport Corporation, 261 Fifth Avenue, New York City, states that it is prepared to accept deposits which may be used by persons in Russia to make purchases of foodstuffs, clothing, and other commodities in ‘Torgsin’ stores which are maintained in approximately fifty cities in that country. Although the Department cannot, of course, assume any responsibility for the integrity of the corporation in question, it is suggested that you may desire to communicate with it…” He enclosed a list of banks “to transmit funds to Russia”. (SDDF 861.48/2427)