Category Archives: Britain

by Joel | 13 May 2024 · 5:38 am

Chinese in Colonial Vietnam

From The Ethnic Chinese and Economic Development in Vietnam, by Tran Khanh (Institute of Southeast Asian Studies, Singapore, 1993), pp. 21-25:

Two major factors converged to cause an upsurge in Chinese migration to Vietnam in the second half of the nineteenth century. A push factor was the political upheavals in China, which led to its people seeking better conditions overseas. A pull factor was French colonization and the policy of the colonial government to recruit Chinese labour for Vietnam.

After the Treaty of Nanking in AD 1842 forced the Manchu court in Beijing to cede Hong Kong to the British and open five treaty ports to Western powers, it was no longer possible for the Chinese authority to control the movement of their nationals in and out of the country. At that time, the Chinese Government had officially banned travelling beyond the shores of China. Thus China became an increasingly stable source of manpower for labour-hungry Western colonies in Southeast Asia and Latin America. By AD 1860, articles within the Treaty of Peking signed between China and both Britain and France literally compelled the Manchu authorities to recognize the right of Chinese workers to seek a livelihood abroad under contracts they themselves could freely enter into. Dovetailing with this relaxation of laws on emigration was the political turmoil of the times which contributed to the urge to leave. During AD 1850-61 there was a large-scale uprising in the form of the Taiping Revolution. Added to that were the intermittent wars fought with Western powers. The majority of migrants in this exodus were the usual land-deprived peasants and impoverished city dwellers. But there was also a sizeable number of small and middle-scale business men, intellectuals, and military personnel.

France colonized six provinces of southern Vietnam (Nam Ky), which constituted Cochinchina, in AD 1867 and established protectorates in central and northern Vietnam by AD 1884. The two protectorates were named Annam and Tonkin, respectively. From the start, the French colonial administration took measures to regulate Chinese immigration with a mixture of control and encouragement. In AD 1874 a special Immigration Bureau was established in Saigon which allowed Chinese immigrants into the country but only if they belonged to dialect groups already existing in the country and if the groups would provide sponsorship for their own kind. The Bureau was very active, and as early as AD 1897 it had a department that could arbitrarily decide on the suitability of a Chinese immigrant for work; this aroused such an angry protest from the Chinese community that the administration was forced to close it down. After this, streams of Chinese immigrants could cross freely into Vietnam, and they congregated mainly in big cities.

The French colonial administration allowed the Chinese to deal freely in rice, opium, and alcohol. Other legal rights included the right to own land, to travel without restriction within the Indochinese Federation, to establish commercial organizations, to return to China for a visit, and to transfer their wealth out of the country. Such favourable conditions continued to attract Chinese migrants as in the days of the Nguyen dynasty. Within a ten-year span, the number of Chinese in Cochinchina shot up from 44,000 in 1873 to 56,000 in 1889, concentrating mainly in big cities. Cholon in the year 1889 had a population of nearly 16,000 Chinese; Saigon, over 7,000; and Gia Dinh, nearly 3,000. In Tonkin and Annam, the Chinese migrants also gathered in Haiphong, Hanoi, Danang, and the Quang Ninh province, which bordered China. The Chines here were involved mostly in commerce and service.

Chinese immigrants during the period of late nineteenth and early twentieth centuries also consisted of labourers contracted by the French to work in Vietnam. They were sent to excavate mines, specifically in Quang Ninh province, to build the railway linking Vietnam to the southern provinces of China or to tap rubber in plantations. By the 1920s, Chinese workers accounted for 7 per cent of the total number of miners and 17 per cent of the total number of industrial workers in Vietnam. The influx of Chinese labourers contributed not only to the country’s manpower but also to the emergence of a working class in Vietnam.

This rapid influx of Chinese migrants continued up till the middle of the twentieth century. Data published during the period AD 1912-22 give their number as 158,000. Between 1923 and 1933, nearly 600,000 arrived from China. Another set of data estimates the number to be 1.2 million between 1923 and 1951, which was a record at any given period of time during the whole history of Chinese emigration. But the traffic was prone to ebb and flow. The figures were high in the years 1925-30, 1936-38, and 1946-48, correlating with the security situation in China. China was experiencing civil wars during the periods 1924-27 and 1946-49. The years 1936-38 saw the beginnings of Japanese military encroachment on China. Going by official statistics, the figure for the Chinese population in Vietnam in the years just before the French left in 1954 would range from 600,000 to 750,000. Variations of this figure for different years are shown in Table 1, estimated to be 2 per cent of Vietnam’s population.

The distribution of population also shows Chinese preference for urban centres and the southern part of the country. Before 1945, some 90 per cent of the Chinese community were residing in Cochinchina, where they made up 7 per cent of the population. The proportions of Chinese in Tonkin and Annam were minimal, 0.5 per cent and 0.2 per cent, respectively. Table 2 illustrates the urban characteristic of the Chinese population in Vietnam.

In 1952 the Chinese population in Saigon-Cholon constituted about 34 per cent of the total population of the city. Their proportions in Hanoi and Haiphong were 4 per cent and 15 per cent, respectively. Besides these three big cities, the Chinese were also found in sizeable numbers in other cities of the South. As mentioned earlier, the border province of Quang Ning in the North also had concentrations of Chinese, as in Cam Pha, Ti Yen, Quang Ha, and Mong Cai. With towns where large numbers of Chinese reside, they would also gather in particular quarters or streets. For example, in Saigon, they are to be found in districts 5, 6, 10, and 11. District 5 is Cholon, where before 1975, 80 per cent of the residents were Chinese. In Hanoi, they were gathered at the Hang Buom and Ma May quarters.

With the division of the country into two halves in 1954, complete integrated statistics were not available for the whole of Vietnam. The South became the Republic of Vietnam (ROV) while the North was the Democratic Republic of Vietnam (DRV) and it was not till 1976 that they were united under the name of the Social Republic of Vietnam (SRV). By Tsai Maw Kuey’s data, the Chinese population in the ROV in 1968 reached 1,035,000. The French magazine Le Monde puts it at 1,200,000 in the ROV and 208,000 in the DRV in 1970. Wu Yuan-Li and Wu Chun-Hsi’s figures are 2 million for the South and 175,000 for the North at the collapse of the ROV. According to official figures for 1976, the year of reunification, the Chinese population in Vietnam was 1,236,000, which was about 2.6 per cent of the total population. Summing up these various estimates, it can be concluded that the Chinese population in Vietnam in the middle of the 1970s was around 1,500,000, of which 85 per cent lived in the South. The Chinese community made up 3 per cent of the total population of Vietnam.

The problems of estimating the Chinese population in Vietnam continued after 1975 because of large-scale population movement caused by political changes. When the Saigon regime collapsed in April 1975, some 150,000 people left the country, among whom were high-ranking government and military officials of the old regime as well as Chinese businessmen. Shortly after, beginning in 1978, another exodus of Chinese residents took place, with 230,000 leaving for China and another 220,000 leaving for Southeast Asia by boat. This was the result of the socialist transformation of private capitalist industry and trade in the newly liberated South and tense relations with China. The latter arose because of differences over Cambodia, and Beijing exploited the issue of the Chinese community in Vietnam to complicate matters. From a population of 1,236,000, the ethnic Chinese population shrank to 935,000 on 1 October 1979. By the time of the census in April 1989, the Chinese population had increased to 961,702 but its proportion of the total population had dropped to 1.5 percent. The distribution of this community across Vietnam is given in Table 3. In some areas, the proportion of ethnic Chinese had dropped very significantly. For example, before 1978, ethnic Chinese residents in Quang Ninh province numbered about 160,000, or 22 per cent, of the provincial population. This was about 60-80 per cent of the total ethnic Chinese population in North Vietnam. In the 1980s, Quang Ninh’s ethnic Chinese population dropped to 5,000, or 0.6 per cent, of the provincial population.

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by Joel | 11 May 2024 · 5:08 am

Chinese Under Vietnamese Dynasties

From The Ethnic Chinese and Economic Development in Vietnam, by Tran Khanh (Institute of Southeast Asian Studies, Singapore, 1993), pp. 17-20:

When Vietnam became independent of its Chinese colonial masters in AD 938 and power was consolidated by the Ly dynasty (AD 1009-1225), the issue of the ethnic Chinese as a resident community of foreign nationals and how they are to be treated arose. Thus began a form of assimilation policy. During the reign of the Ly’s and the the subsequent Tran dynasty (AD 1226-1400), the us of ethnic Chinese scholars and officials in leading administrative position was advocated. But this applied to only those Chinese who had chosen to settle permanently in Vietnam. Those who retained their migrant status could not even travel without permission from the local authorities.

During the Later Le dynasty (AD 1428-1592) and under the rule of the Trinh lords in the north up till AD 1788, assimilation and surveillance of the Chinese community intensified. The Chinese had to abide by Vietnamese laws, conform with Vietnamese customs and traditions, even to the extent of dressing the Vietnamese way. Chinese immigrants were not free to travel within Dai Viet (Great Viet, the name of the country then), particularly in the vicinity of Thang Long, the country’s capital. The more stringent Vietnamese attitude towards the Chinese community was because the Le’s reign came as a result of having defeated the occupied force of China’s Ming dynasty. The Chinese army had earlier entered Vietnam on the pretext of helping the then Tran emperor to quell a rebellion. They stayed on for twenty years (AD 1407-1427).

This was how assimilation gradually proceeded over the centuries. However, as mentioned above, new waves of migrants in the later part of the seventeenth century strengthened the identity of the Chinese community. It was not just a question of numbers. A new factor had also emerged to raise the socio-economic status of the Chinese. That was the growing importance of international commerce as more Western powers started to make their appearances in this part of the world in the seventeenth century. To understand the extent of Chinese participation in this important trade, let us look at some of these trading centres.

As mentioned earlier, small Chinatowns started to emerge in almost every main city and in various important economic centres in Vietnam around this time. Examples would include Pho Hien, Hoi An (then known by foreigners as Faifo), Phien Tran (today’s Gia Dinh), Tran Bien (today’s Bien Hoa), Cholon, and Ha Tien. Pho Hien, located in the centre of the Red River plain in the north, came into being in the thirteenth century. Due to the thriving business in the beginning of the seventeenth century, more Chinese, Japanese, and Europeans were attracted to this town. The Dutch East India Company sent a trade representative there in AD 1637. The English East India Company also established an office there in AD 1672. Unlike the European and the Japanese, Chinese merchants not only traded, but also participated in the production of black incense, alum sugar, sedge mat, Chinese medicinal herbs.

The old town of Hoi An, 26 km north of Danang, was reputedly the most busy trading port of Vietnam from the sixteenth to eighteenth centuries. Its rise was mainly owing to foreign merchants, especially Chinese and Japanese, who controlled the external trade since native Vietnamese were not active in the seafaring business. European traders who called at this port in the seventeenth century related that Hoi An town had two special quarters: one Chinese and other Japanese, with each ruled by a Vietnamese governor.

According to Le Qui Don, a renowned historian of that time, commerce and handicraft were the two main livelihoods of Hoi An’s Chinese residents. They bought brass utensils transported there by European vessels and resold them in their own quarters. The seven-month long trading season began approximately with each new year and the natives would bring their products here for sale, things such as raw and processed silk, various kinds of wood and spices, and rice. Vessels from China arrived loaded with porcelain, paper, tea, silver bars, arms, sulphur, saltpeter, lead, and lead oxide. According to another source of history, the amount of gold extracted in South Vietnam was mainly for export. Chinese merchants from Hoi An bought over this volume to export. Gold, which was reserved entirely for export, was monopolized by the Chinese merchants of the town. Historic documents stated that by the eighteenth century (AD 1714), Chinese merchants of Hoi An established the Sea Trading Association. This was probably the first in stance of institution-building by the Chinese migrants. There were in AD 1768 nearly 6,000 Chinese, most of whom were engaged in trading.

Chinese-dominated trading centres have their ups and downs, a result of political changes within Vietnam and the Chinese community’s relationship with the ruling powers of the time. This relationship and the status of the community was sometimes a function of state-to-state relations between China and Vietnam. Cholon, which is today still famous as a hub of Chinese economic activities, was one such example. It began as a small settlement of villages 5 km. from Saigon, born of the Tay Son rebellion, which began in the early 1760s and ended with its leaders taking over the whole country in AD 1788. In order to escape the ravages of the Tay Son uprising, in AD 1778 a group of Chinese moved from their settlement in Tran Bien (today’s Bien Hoa), northeast of Saigon, to a place that came to be known as Cholon (today’s districts 5 and 6 of Ho Chi Minh City), southwest of Saigon. This land was given to them by Le Van Duyet, the lord of that area and who was opposed to the Tay Son rebels. In AD 1792, during the reign of Tay Son, there was a massacre of the Chinese in Cholon.

There were explanations to account for the Tay Son period, both during their uprising and when they were in power, this being a difficult time for the ethnic Chinese. The latter were on the wrong side since they were generally supportive of the Nguyen lords, the corrupt ruling order which the Tay Son leaders were seeking to overthrow. The Nguyen lords, and the imperial court at Hue that they controlled, had allowed Chinese migrants into the country and to prosper in their business. This effete regime was also heavily steeped in Confucianism and patterned on the Chinese imperial court, influences which the Tay Son leaders sought to remove. Furthermore, the Tay Son rebellion took its roots from widespread peasant discontent and the Chinese, a distinctive urban elite, were therefore a natural target. Finally, the Nguyen lords called on the assistance of the Qing emperor in China to help fight the rebels, and in AD 1788 an army from China invaded. It was defeated, however, but it must have added to anti-Chinese feelings within the Tay Son movement.

In AD 1802 the Tay Son dynasty was toppled by Nguyen Anh, one of the last Nguyen lords. Nguyen Anh then established the Nguyen dynasty, declared himself Emperor Gia Long, and reverted to a Confucian orthodoxy patterned after the Qing court in China. Chinese business activities flourished under the Nguyens. By the time the French acquired South Vietnam as a colony of Cochinchina in AD 1867, Cholon had 500 tiled houses, two man-made canals, and five bridges under construction, including one of iron. The quay along the Arroyo Chinois was covered with warehouses and shipyards. In the centre of the town was placed a fountain of Chinese design, and the streets were lit by lamps using coconut oil.

The Nguyen rulers used Chinese merchants in the collection of taxes, encouraged them to set up shipyards to build boats and ships, allowed them to buy houses, acquire land, and foorm their own social and economic organizations. Historical records show that in some economic sectors, the Chinese were even more favored than the Vietnamese. They could, for example, build ships of any capacity while the Vietnamese were allowed to build only small ships. In the first half of the nineteenth century, the Nguyen court exempted new Chinese immigrants from all taxes in the first three years after their arrival. Such preferential treatment for the Chinese community helped them to expand their economic power. It also encouraged further immigration by the Chinese.

What was the motivation of the Nguyen court for encouraging the Chinese? First, the increasing wealth of the Chinese community served the interest of Vietnam’s ruling class. Officials got financial spinoffs from Chinese businesses. The Chinese also brought useful handicraft skills. There were also common strategic interests at that time as Asian countries were starting to experience the encroachment of Western imperial powers. For Vietnam, a bigger and stronger China next door may be useful to fend off Western powers.

Besides commerce, the Chinese in Vietnam were also actively involved in investment and mining. In the first half of the nineteenth century, the Chinese operated 124 mines in the North on lease. They recruited their own miners, mostly new arrivals from China. Materials extracted from these mines, such as iron and coal, were generally for export with a small proportion reserved as tax payment to the Vietnamese authorities. Despite measures by local authorities to restrict Chinese miners, their numbers rose to 700-800 at times. It was a general tendency then for successful Chinese mine formen to return to China or revert to trading after having reaped huge profits from mining. Even though Chinese mining entrepreneurs paid taxes to the royal court and also reinvested part of their earnings, the overall participation of the Chinese in mining represented a loss rather than a gain of capital for Vietnam. Chinese leasing of mines was subsequently prohibited by law when the French colonized the country.

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by Joel | 5 May 2024 · 6:20 am

Who Killed Weimar Democracy?

From The Weimar Years: Rise and Fall 1918–1933, by Frank McDonough (Bloomsbury, 2023), Kindle pp. 673-678:

Given all the cumulative problems it faced, it is surprising Weimar democracy lasted as long as it did, but we need to remember that it endured longer than Hitler’s Third Reich. The period from 1918 to 1923 was politically and economically turbulent, but democracy survived. Between 1924 and 1929, the economy stabilised, Germany regained international respectability, and democratic rule was never threatened. Even in the period of deep political and economic crisis between 1930 and 1933, during the time of authoritarian ‘presidential rule’, there was no attempt to overthrow the Republic.

The commonly held view is that the ‘Great Depression’ led to the collapse of Weimar democracy, and brought Hitler to power, is not credible. The USA and Britain suffered economic problems often as difficult as those of Germany, but democracy did not collapse in either of those countries. This suggests there was something specific about the nature of the political and economic crisis that was peculiar to Germany at this time.

The two decisive ingredients in the period from 1930 to 1933 were the supreme indifference of President Hindenburg, and his inner circle, to sustain democratic government, and the dramatic rise in electoral support for Adolf Hitler and the NSDAP. It was a toxic mixture of these two factors, operating at a time of deep economic depression, which ensured Germany’s experiment with democracy failed.

Yet the seeds of the Weimar’s democratic tragedy were planted by the type of democratic system established after the November Revolution of 1918, and embedded into the Weimar Constitution of 1919. The November Revolution was a very strange one indeed, which left Germany’s judicial, bureaucratic, and military elite largely intact. Weimar judges punished those on the Left with harsh sentences, while treating radicals on the Right very leniently, and the Reichswehr remained a law unto itself, being more preoccupied with shaking off the military restrictions placed upon it by the Treaty of Versailles than defending democracy.

One of the essential ingredients for the successful transition from an authoritarian to a democratic form of government is the existence of a strong, resilient party of the moderate Right, committed to the ideals of democracy. In Britain, the Conservative Party fulfilled this role, evolving from the late 19th century into a mainstay of the British party system. In Germany, no such party was able to take on that stabilising role. The leading conservative party in Germany was the DNVP. Between 1919 and 1930, its voter support reached a high point of 20.5 per cent and 103 seats in the December 1924 election, but then fell to a low point of 7 per cent at the September 1930 election, when it gained just 41 seats. During the Weimar era, the DNVP was a bitter opponent of Weimar democracy, with a leader in Alfred Hugenberg who moved the party to the extreme Right.

Germany’s military defeat in the Great War also cast a giant shadow over the Weimar Republic. The ‘stab-in-the-back’ myth, which held that Germany was not defeated on the battlefield, but betrayed by Liberals, Jews and Socialists on the home front, remained a powerful one. Some of these negative feelings fed into the general hatred of the terms of the Treaty of Versailles. The inclusion of Article 231, known as the ‘war-guilt clause’, seemed particularly vindictive. Add in the bill for reparations and you have a perfect recipe for deeply held animosity towards democracy. Any government forced to sign such a treaty would have been unpopular, but the fact this task fell to the SPD-led coalition government was deeply damaging for the stability of democracy. The tag ‘November Criminals’ was hung around the necks of those politicians who had instigated the fall of the Kaiser and were responsible for the establishment of democracy.

There were also two aspects of the Weimar Constitution which undoubtedly contributed to the failure of democracy. The first was the voting system, based on proportional representation, which gave Reichstag seats in exact proportion to the votes cast in elections. In Germany, this system did not work. In July 1932, 27 different political parties contested the election, ranging across the political spectrum, with each representing one class or interest group. These differing parties reflected the bitter divisions in German society and made the task of creating stable coalition governments extremely difficult, and eventually impossible. Some coalitions took weeks to form, but could fall apart in days. The last functioning Weimar coalitions were those led by SPD Chancellor Herman Müller between 1928 and 1930, involving the SPD, Zentrum, the DDP, the DVP, but they finally broke apart over the increasing payments of unemployment benefits.

The Weimar Republic also lacked the one key factor that made democracy stable in the USA and Britain – that is, a two-party system, with one left-wing liberal democratic and one conservative party, alternating in periods of power, with each loyal to the democratic system. If there had been a first-past-the-post electoral constituency system, as operated in Britain, then probably a small number of parties would have ruled, and there would have been a better chance of stable government, although given the deep differences between the Weimar political parties that is by no means certain.

Those who drafted the Weimar Constitution were unwittingly culpable in offering a means of destroying democracy. This was the special powers the Weimar Constitution invested in the role of the President. No one realised when drafting the Constitution how an anti-democratic holder of the post could subvert the power of the President. Article 48 gave the German President extensive subsidiary powers in a ‘state of emergency’ to appoint and dismiss Chancellors and cabinets, to dissolve the Reichstag, call elections and suspend civil rights. The two German presidents of the Weimar years were quite different. Social Democrat Friedrich Ebert was an enthusiastic supporter of Weimar democracy. He used Article 48 on 136 occasions during the period 1918 to 1925, but always with the intention of sustaining the Republic by preventing coup attempts, not with the aim of undermining or threatening its existence. Paul von Hindenburg, elected in 1925, was a great contrast. He was a right-wing figure, who had led Germany’s militaristic armed forces during the Great War of 1914–1918. Up until March 1930, Hindenburg never used Article 48 at all. Henceforth, influenced by a small inner circle of advisers, all militaristic and authoritarian in outlook, he appointed Chancellors of his own choosing, who remained in power using emergency powers granted under Article 48.

It was President Hindenburg, therefore, who mortally damaged the infant democratic structure in Germany more than anyone else. It was not the Constitution or the voting system that was the fundamental problem, but the culpable actions of Hindenburg, who chose to deliberately subvert the power it had invested in him. Hindenburg appointed three Chancellors between 1930 and 1933: Heinrich Brüning, Franz von Papen, and Kurt von Schleicher, all of whom governed using emergency decrees granted by the President.

The political crisis after 1930 was deliberately manufactured by Hindenburg, who refused to involve Social Democrats in government, who were the strongest supporters of democracy. It must not be forgotten, however, that from 1930 onwards Adolf Hitler was the single most dynamic and popular politician in Germany. He united the voters on the Right of German politics in a way no other politician had been able to do so since the beginning of the Weimar years. The NSDAP managed to be anti-elitist and anti-capitalist while at the same time being patriotic and nationalist. The spectacular voting rise of the NSDAP from 2.63 per cent of voters in national elections in 1928, to 18.3 per cent in 1930, then to a high point of 37.3 in July 1932, was on a scale never seen in a democratic election before.

It was not by elections that Hitler finally came to power, however, but he would not have even been considered as a potential German Chancellor without his huge electoral support. A total of 13.74 million people voted for Hitler of their own free will in July 1932. Solid middle-class groups, usually the cement that holds together democratic governments, decided to support a party openly promising to destroy democracy. This mass electoral support was the decisive factor that propelled Hitler to a position where he could be offered power. Hitler’s party grew because millions of Germans felt democratic government had been a monumental failed experiment. To these voters, Hitler offered the utopian vision of creating an authoritarian ‘national community’ that would sweep away the seeming chaos and instability of democratic government, and provide strong leadership.

Yet Hindenburg needed a great deal of persuading before he finally made Hitler the Chancellor of a ‘national coalition’. It was former Chancellor Franz von Papen who played the most decisive role in convincing Hindenburg that Hitler could be ‘tamed’ by being invited to lead a cabinet of conservatives. By then, the only alternative to Hitler taking on the role was for Hindenburg to grant Schleicher, the current Chancellor, the power to declare a ‘state of emergency’, ban the Communists and National Socialists, suspend the Reichstag indefinitely and rule with the support of the Reichswehr. Behind-the-scenes intrigues and the personal rivalry between Franz von Papen and Kurt von Schleicher were also factors that played a crucial role in bringing Hitler to power. But it was Hindenburg’s decision in March 1930 to create a presidential authoritarian right-wing regime that was the most decisive step that opened a path towards this solution.

The real problem Hindenburg faced was that the three previous Chancellors, Brüning, Papen and Schleicher, had no popular legitimacy, and no parliamentary support. Hindenburg’s presidential rule had taken Germany down a blind alley. The only politician who could add popularity to Hindenburg’s faltering presidential regime was Adolf Hitler. It was the decision to appoint the NSDAP leader as Chancellor which put the final nail in the coffin of Weimar democracy, and opened the path to catastrophe for Germany and the world. Hindenburg had been the gravedigger and the undertaker.

The history of the Weimar Years is therefore a warning sign of how a democracy under poor leadership can drift towards a form of authoritarian rule that ultimately destroys it, under the pressure of economic crisis and unrelenting political instability. This is a question that continues to engage us today.

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by Joel | 30 April 2024 · 5:41 pm

Austrian-German Banking Crisis, 1931

From The Weimar Years: Rise and Fall 1918–1933, by Frank McDonough (Bloomsbury, 2023), Kindle pp. 575-576:

The bungled fiasco of the German–Austrian Customs Union led directly to the Austrian banking crisis. On 13 May, the Creditanstalt, the largest and most respected Austrian bank, suddenly declared bankruptcy, sending shock-waves through world financial markets. Jittery creditors everywhere withdrew funds. The bank’s initial losses amounted to 828 million Austrian schillings. During May, Austria’s foreign-currency reserves fell by 850 million schillings. Otto Ender, the Austrian Chancellor, was forced to put together a government-backed financial rescue plan by buying up 100 million schillings’ worth of Creditanstalt stock. Support in this rescue package was given by the powerful Rothschild banking family of Austria, and on 16 June the Bank of England provided a sizeable loan to the Austrian government to assist with the plan.

The Austrian banking crisis had a domino effect, with the panic-selling of the stock of German banks soon following. In early June, the Reichsbank announced it had suffered the withdrawal of 1 billion Reichsmarks since the Creditanstalt collapse, with foreign deposits falling by 25 per cent. The German government was now having great difficulty in raising foreign loans to service its huge public-spending deficit, and the Reichsmark was falling on currency markets. On 5 June, Brüning issued the Second Emergency Decree for the Protection of the Economy and Finances, which brought in reductions in welfare benefits, wage cuts for all public-sector employees, plus a ‘crisis’ tax, levied on better-paid white-collar workers, and increases in sales taxes on sugar and imported oil. The one concession to organised labour was a promise of 200 million Reichsmarks for the funding of public works. This new decree was accompanied by a blunt declaration from Brüning that ‘the limit of privations which we can impose on the German people had been reached’, and he further warned that Germany could not make the reparations payments due in 1931 under the Young Plan.

On 7 June, Heinrich Brüning, accompanied by Julius Curtius, the German Foreign Minister, met with Ramsay MacDonald, at Chequers, the British Prime Minister’s picturesque country retreat. The purpose of the visit was for a ‘mutual exchange of views’. Also present was Montagu Norman, the Governor of the Bank of England, who expressed dissatisfaction with Brüning’s announcement of his intention to suspend reparations payments. In response, Brüning explained his declaration was really a warning of what would happen if the issue of Germany’s payments for 1931 was not urgently addressed. The friendly meeting only yielded the release of a joint statement, which laid stress on ‘the difficulties of the existing position in Germany and the need for alleviation’.

The US President, Herbert Hoover, was following European economic affairs closely, and he fully appreciated the impact the financial collapse of German banks would have on American creditors. The magnanimous proposal by Hoover of a payments moratorium was initially opposed by the French government, Germany’s principal reparations creditor, but was finally accepted, on 6 July, with the condition that the German government spent the one-year saving on reparations for domestic rather than military purposes. The Hoover Moratorium really marked the beginning of the end of German reparations payments, which were never resumed.

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by Joel | 25 April 2024 · 1:32 pm

Catching an Interned Spy

From The Island of Extraordinary Captives: A Painter, a Poet, an Heiress, and a Spy in a World War II British Internment Camp, by Simon Parkin (Scribner, 2022), Kindle pp. 257-258, 281-282:

WARSCHAUER HAD FIRST COME TO MI5’s attention in early 1940, after the chief constable of the Special Branch, Scotland Yard, received a letter from the former head of the German Jewish Aid Committee, the thirty-seven-year-old Hubert Pollack, who claimed to have helped [Ludwig] Warschauer obtain the immigration permits for Echen and her family. Pollack explained in his letter that, while he had known Warschauer to be an acquaintance of high-ranking Nazis, he had had no reason to suspect his loyalties at the time. In recent weeks, however, he had learned of Warschauer’s involvement with a sting operation in Berlin.

The ruse, Pollack claimed, went like this: Warschauer would invite a Jewish acquaintance whom the Gestapo wanted to arrest to lunch in a public restaurant. At some point an Aryan woman would join them at the table. Warschauer would excuse himself, and the moment he left the table, Gestapo personnel would enter and arrest the man for fraternizing outside of his race. Pollack felt compelled to alert the British to this information, adding that while Warschauer owed him money, this was not his motive for writing.

Sir Vernon Kell, then director of MI5, read the letter with keen interest. This was precisely the kind of suspicious activity—with “a Gestapo flavor”—that Kell had been looking for among refugees in Britain. MI5 duly opened a file that, thanks to the informants in Hutchinson [Internment Camp], had now grown to a weighty document.

Information had come from various sources. A private serving in the Pioneer Corps claimed that Warschauer had masterminded a profitable blackmail operation in Berlin. The soldier claimed that the engineer had an arrangement with a pretty barmaid. Warschauer would go out drinking with a target; then, once they were blind drunk, deliver the individual to a room at his accomplice’s bar. In the morning the man would awake to find the barmaid next to him in bed. Warschauer would then extort the target for money in exchange for discretion. Men now in Hutchinson may have been victims of the scheme.

…

The author and translator Claud W. Sykes, a senior figure at MI5 who concluded that “[Warschauer] would have been a Nazi but for his Jewish blood,” wrote a letter recommending that Warschauer be immediately transferred from Hutchinson camp, to separate him both from his cronies and the indulgent commandant.

“It seems to me too dangerous to leave him in a position where he is [Major] Daniel’s blue-eyed boy,” wrote Sykes.

In March 1942, five months after Peter left the camp and when only about 350 men remained in Hutchinson, Warschauer was transferred from the island to the London Oratory School on Stewart’s Grove, in the salubrious London Borough of Chelsea, also known as Internment Camp 001, which was used to house high-security internees.

BY EARLY 1942, THE INVESTIGATOR James Craufurd’s suspicion that Warschauer had been sent to England as a Gestapo agent had grown “nearly to a certainty.” The evidence collected during MI5’s raid on Warschauer’s office—in the home he shared with Echen—had provided a mountain of jigsaw pieces. Among the haul there were letters from Dr. Hans Sauer, the man who had ensured Warschauer’s smooth exit from Germany, as well as canisters of photographic film rigged to produce a blotted-out image unless developed in a specific way. MI5 spent weeks studying the letter Sauer had sent Warschauer for clues and code words, even employing an expert to analyze Sauer’s handwriting (“There is in the writing unusual intelligence, knowledge and mental ability, but a bad man,” the expert concluded banally).

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by Joel | 23 April 2024 · 8:39 am

Rushen Women’s Internment Camp

From The Island of Extraordinary Captives: A Painter, a Poet, an Heiress, and a Spy in a World War II British Internment Camp, by Simon Parkin (Scribner, 2022), Kindle pp. 199-201:

The Rushen women’s internment camp had opened on the [Isle of Man’s] southern peninsula on May 29, incorporating two small seaside resorts: Port Erin and Port St. Mary. Despite the considerable number of women held there—close to four thousand, three hundred of whom were pregnant—security was laxer than at the men’s camps. A single barbed-wire perimeter encircled both resorts and, while the women had to apply for a permit before they could visit each other’s houses, they were free to walk between the two sites without hindrance.

At first the Hutchinson men whose wives were interned on the island had to send letters via the usual route to the backlogged censor’s office in Liverpool, where delays often meant their messages were long out-of-date by the time they arrived. From the moment the first internees arrived on the island, Bertha Bracey had pressured the government to establish a separate camp for married couples. Convincing the relevant departments to make such an expenditure was proving difficult.

In lieu of a married camp, Hutchinson’s intelligence officer, Captain Jurgensen, announced in late autumn the first monthly meeting between husbands and wives interned on the island. The rendezvous, he explained, would take place at the Port Erin branch of Collinson’s Café.

On the morning of the first meeting, a group of around fifty men, wearing their finest clothes and, in some cases, carrying bunches of flowers, gathered in readiness to leave the camp and be reunited, for a fleeting moment, with their imprisoned wives. A few hours later the men returned to Hutchinson. Many looked dejected. Werner Klein, one of Hinrichsen’s neighbors who had gone to meet his wife, explained to his friend that the psychological conditions in the women’s camp were even more strained than at Hutchinson. His wife had told him that Rushen was riddled with Nazi sympathizers, who had been whipped into a state of obstinate zeal by their self-appointed leader, Wanda Wehrhan, wife of a Lutheran pastor based in London and an energetic fascist. There had been no consideration of race or political allegiance when allocating women to Rushen’s houses. In some cases, Jewish women had been forced to share beds with fervent anti-Semites.

The Nazi women, like many of the male internees, believed that invasion was imminent. In some houses, Jewish women were banned by their Nazi housemates from the common room and forced to remain in their bedrooms. When one refugee entered the local Methodist church, one of the Nazis said, loudly: “Oh there is a bad smell, a Jewish smell, in this church.”

The women were permitted to leave the camp to shop twice a week. One of the landladies whose house had been requisitioned recalled overhearing a group of Nazi-supporting women discussing which of the local houses they would take for themselves when Germany won the war.

Rushen camp’s commandant, Dame Joanna Cruickshank, was seemingly ill-equipped to deal with these sensitivities and conflicts. Cruickshank, a former matron in chief of both Princess Mary’s RAF Nursing Service and the British Red Cross, had enjoyed a distinguished career in military nursing appointments. She had formidable powers of organization, but no understanding—or apparent willingness to understand—the situation of the women in her charge. She hired Nazi women to work on the camp staff, granted them access to camp records and, intent on preserving impartiality, ordered Jews and Nazis to collaborate on the production of the camp’s newspaper, of which only a single issue was produced.

Unaccustomed to being questioned by intelligent women from civilian life, Cruickshank became entrenched when challenged on her decision-making. When Klein’s wife, a non-Jew, had proposed to her camp commandant the separation of Jews and Nazis, Cruickshank said: “You are all enemy aliens, and that is the end of it.”

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by Joel | 19 April 2024 · 6:02 am

Effects of the Arandora Star Sinking

From The Island of Extraordinary Captives: A Painter, a Poet, an Heiress, and a Spy in a World War II British Internment Camp, by Simon Parkin (Scribner, 2022), Kindle pp. 178-179:

THROUGHOUT THE WARM WEEKS OF July [1940], as Hutchinson’s internees appointed their leaders and cooks, drew up the schedule of lectures and entertainments, and learned to paint, a pile of suitcases sat in a corner of another internment camp in Devon, a few hundred miles away. Rescued from the wreck of the Arandora Star, these unclaimed effects were the somber luggage of the recently deceased. It was a smaller pile of belongings than those left at the doors to the Holocaust’s shower rooms, but still emblematic of injustice. As the swollen bodies of the dead began to wash onto Irish and Hebridean beaches, so fresh details about the tragedy continued to emerge, casting further doubt on the official version of events.

On July 30, in the House of Commons, the secretary of state for war, Anthony Eden was asked whether the government had known for sure that, as previously claimed, everyone aboard the Arandora Star had been a Nazi sympathizer. By now, Eden knew for certain that this had not been the case.

“Fifty-three [Germans and Austrians aboard] were or claimed to be refugees, but had nevertheless been placed in category A,” he conceded.

In Whitehall, the impersonal statistics were now clothed with the intimacies of story. Politicians learned that, among the dead, there was a German sailor who came to Britain as an anti-fascist, only to be interned with a “mélange” of Nazi sympathizers; there was a metalworker who, after spending four years imprisoned in Nazi camps, escaped to Britain, was interned, then killed in the sinking; there was the blind pensioner who had been separated from his wife for the first time in his life.

The admission that refugees of Nazi oppression had been aboard the ship caused widespread outrage and called into question the wider policy of mass internment, which had begun to seem less like a rational security measure and more like victim-blaming on an industrial scale. The Jewish Chronicle, which just a few months earlier had defended a wartime government’s “right to interfere drastically with the freedom of the individual,” now likened the “disgraceful hounding of refugees” to “Gestapo methods.” Readers agreed. “It seems strange that in order to defeat the Gestapo abroad, it should be considered necessary to introduce their methods at home,” wrote Moya Woodside in a typical letter published in the Northern Whig. The public’s attitude had changed. Policy would duly follow.

While still far from secure, Britain’s general position in the war had shifted enough that, as Churchill put it to his cabinet, it was now possible to “take a somewhat less rigid attitude in regard to the internment of aliens.” Arrests, which had continued at a rate of around 150 per day throughout July, were suspended. If a so-called enemy alien had thus far managed to avoid being apprehended, they would most likely remain free for the remainder of the war. Mass internment was finished.

“That tragedy may… have served a useful if terrible purpose,” said Lord Faringdon of the Arandora Star in a speech to the House of Lords later that week. “For it may have opened the eyes of those responsible, and of members of the public, and of His Majesty’s Government.” It would take months and years to unpick the tangled mess of internment. Politicians’ efforts to justify and distance themselves from the episode were, by contrast, immediate.

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by Joel | 18 April 2024 · 8:30 am

Hutchinson Internment Camp in U.K.

From The Island of Extraordinary Captives: A Painter, a Poet, an Heiress, and a Spy in a World War II British Internment Camp, by Simon Parkin (Scribner, 2022), Kindle pp. 164-166:

Hutchinson was six weeks old; Peter had entered a maturing universe. The internees had developed their daily routines—the favored mug, the preferred toilet cubicle, the ideal route to take when crossing the lawn—habits of minor, vital comfort. The camp’s daily, immovable routine provided the semblance of a reassuring structure, too. For those who couldn’t manage to rouse themselves for the optional dawn exercises held on the lawn square at 7:00, there was mandatory roll call at 7:30. Breakfast: 8:15. Lunch: 12:30. Supper: 7:00. Then, a final counting of heads at 9:30 in the evening.

Thanks to Ahrends and Hinrichsen’s formidable powers of organization, the camp’s schedule of intellectual diversions had grown and diversified, too. On the week of Peter’s arrival, Hutchinson’s timetable of cultural events listed no fewer than forty lectures. The subjects covered philosophy, bookkeeping, medieval history, and the nutritional benefits of fruit (Title: “Q. ‘Why should we eat oranges?’ A. ‘Vitamins’ ”), as well as performances of Brahms and Schubert by a young graduate of the Royal College of Music, Hans Fürth, accompanied on violin by the impressionist painter Fritz Salomonski.

For internees who wished to practice their French, there was a weekly “Cercle Française” run by Dr. Arthur Bratu, a teacher who fled Germany for Belgium before escaping to Britain on a fishing boat. Anyone interested in photography could join weekly classes offered by Paul Henning, a member of the Artists Café. There were soccer games, chess tournaments, boxing matches, and local hikes—albeit under armed guard—through the island countryside, with its bowed reeds and ragwort. In the afternoons Peter could watch a kind of proto-aerobics session on the lawn: exercise set to music, led by Kurt Böhm, the school gymnastics teacher. For a young orphan from Berlin it was overwhelming.

“Artists? Painting? Concerts? For free? Every day? It was unheard of,” Peter later recalled.

There was, in Hutchinson camp, no shortage for a man in search of diversion. There was opportunity for paid work, too. The Camp Bank consisted of one manager and a few clerks; the Post and Parcel Office employed a postmaster and four staff. Sixteen men made up the Fire Brigade and the Air Raid Precaution Services and had regular drills to practice using the portable reciprocating water pumps known as stirrup pumps. They were supplemented by one doctor and twelve stretcher bearers.

In the six weeks since its opening, the camp office had expanded its range of community services, too. It now housed two shoemakers, a laundry, a tailor, a pressing and ironing service, a shirt repairer, two hairdressers, and four watch repairers; services that had enabled some internees to return to the vocations they had been forced to leave behind in their homelands. At the suggestion of Bertha Bracey’s man-in-situ, William Hughes, the members of this last group fixed watches owned by residents outside the camp at the trade union pay rate, on the proviso that the watchmakers did not train any fellow internees—presumably so as not to further threaten the livelihoods of British workers. Those who preferred outdoor employment could apply to chop wood or work as farm laborers. One group of young men from Hutchinson helped to build the island’s airport, digging ditches and laying cables.

Anyone could buy items from the camp canteen, managed by Hans Guttmann, the director of Hammond book publishing. Guttmann, supported by four shop assistants, would even allow any internee to purchase items on credit, provided they could prove they owned a bank account on the outside. In time, every prisoner of war and internment camp, including Hutchinson, received bespoke currency: generic notes stamped with the “camp of issue.”

The camp had emerging opportunities for men who wished to exercise existing talents or seek out new ones. Few may have recognized Otto Haas-Heye, a distinguished clothes designer who, via his Berlin salon Alfred-Marie, helped shape fashion during the 1920s. After a dozen or so men joined his weaving school and began to produce exquisite rugs under his tutelage and direction, however, everyone recognized his work. A carpentry school taught woodwork, while another group made artificial flowers and stuffed animals. Some items were of a particularly high quality. Michael Corvin wrote of Leon Kuhmerker’s talent for artificial flower making: “The [flowers] consist mainly of fine coloured leather and their appearance is amazingly vivid… no flower leaves the little shop which is not perfect in form and unique in making.”

A shop was opened in Douglas to sell items made by the internees, including rugs from the weaving school and model boats made by the carpenters. In her role as chair of the Central Department for Interned Refugees, Bertha Bracey organized materials for most of the workshops and schools.

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by Joel | 16 April 2024 · 8:37 am

U.S. vs. U.K. on Mass Internment

From The Island of Extraordinary Captives: A Painter, a Poet, an Heiress, and a Spy in a World War II British Internment Camp, by Simon Parkin (Scribner, 2022), Kindle pp. 65-67:

ON SEPTEMBER 1, 1939, TWO days before Britain declared war on Germany, police forces around the country received the order to unseal the envelopes sent by MI5 and arrest those individuals named within. In London, officers escorted the internees to the Olympia exhibition hall on Hammersmith, which had been set aside as a clearing center, even forcing the men to pay for the taxi ride. By the end of the week, 350 individuals had been arrested across the country and delivered to Internment Camp No. 4, an out-of-season seaside resort at Clacton-on-Sea in Essex, just fifteen miles away from the Kindertransport camp at Harwich.

Despite months of investigation and planning, this first wave of arrests—intended to capture only the most dangerous Nazi sympathizers and fervent communists—was characterized by mistakes and misunderstandings. Eugen Spier, Alex Nathan, and Dr. Bernhard Weiss, all Jews and staunch anti-fascists, were among the first men arrested and taken to Olympia, where they were herded alongside bona fide Nazis such as Hitler’s friend Ernst Hanfstaengl. Weiss was the former Berlin police chief and had become famous in Germany after he sued Joseph Goebbels, Hitler’s minister of propaganda, more than forty times for libel and won every time. It was difficult to imagine a less likely suspect for a Nazi spy.

With those MI5 had deemed highest risk interned, the question of what was to be done with the thousands of other “enemy aliens” living in Britain immediately arose. In the House of Commons on September 4, the MP Arthur Greenwood put the following question to the home secretary, Sir John Anderson, who had been on the job only a day: “What steps [do you] intend to take to deal with aliens in time of war?”

For the first time in public, Anderson began to explain the government’s plans.

“A number of aliens whose suspicious activities have been under observation are already under detention,” explained Anderson. Others, he said, would now have to report to the police and obtain permits for change of residence, travel, and the possession of items such as cameras and motorcars.

“A large proportion of the Germans and Austrians at present in this country are refugees, and there will, I am sure, be a general desire to avoid treating as enemies those who are friendly to the country which has offered them asylum,” Anderson continued. “At the same time, care must be taken to sift out any persons who, though claiming to be refugees, may not, in fact, be friendly to this country.”

Here was the essence of the problem facing the British government. In a letter to the foreign secretary, Sir John Anderson explained that “It was felt… it would be wrong to treat as enemies [those] refugees who are hostile to the Nazi regime, unlikely to do anything to assist the enemy and often anxious to assist the country which has given them asylum.” And yet, there was a risk that there could be enemies posing as refugees, spies who had already entered Britain under the cloak of asylum.

On September 29, Cordell Hull, the US secretary of state, sent a telegram to the American embassy in London warning of the moral dangers inherent in a policy of mass internment. Hull referenced the lessons of the First World War, when “the rigorous… internment of enemy aliens” caused “widespread and seemingly unnecessary suffering to thousands of innocent persons.” Copies of the message were also sent to the American embassies in Berlin and Paris, a pointed sign of US neutrality at this stage of the war.

For now, however, the threat of mass internment seemed both remote and mitigated by the plan for the tribunals that, between October 1939 and March 1940, would deliberate no fewer than 73,353 cases, including that of Peter Fleischmann. Most were refugees, and the others long-established residents or people who, by chance, were in Britain at the outbreak of war. Nevertheless, the reliability and loyalty of everyone would be examined by a panel. If suspicions remained, they were to be interned.

Not everyone condoned such a magnanimous approach. Guy Liddell, MI5’s head of counterintelligence, summed up his view of the decision to forgo mass internment with a single word: “Farce.”

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by Joel | 14 April 2024 · 12:39 pm

Death of Stresemann, 1929

From The Weimar Years: Rise and Fall 1918–1933, by Frank McDonough (Bloomsbury, 2023), Kindle pp. 506-508:

As news spread of Stresemann’s death, there was a flood of tributes. The Deutsche Allgemeine Zeitung (German General Newspaper) wrote, ‘It seemed necessary for this man to die for his real greatness to be appreciated by his compatriots.’ There were glowing tributes from leading world leaders, including Ramsay MacDonald, the British Prime Minister, who commented: ‘His memory is secure, and I cannot believe the great service he has given to pacification with such patience and faith can now be undone.’ Aristide Briand, the French Prime Minister, sent a telegram to Stresemann’s widow Käte, which read: ‘I will always retain the deepest respect for his memory. In pursuit of our common ideal, Dr Stresemann caused me to appreciate his lofty outlook and fine loyalty.’

Stresemann lay in state in the German parliament. Thousands of people filed past the open coffin to pay their respects before his state funeral on 6 October. Hermann Müller, the Reich Chancellor, bowed to the coffin in the Plenary Hall of the Reichstag, where the memorial service was held, before delivering a moving eulogy, describing Stresemann as a towering figure in world politics. There was then a solemn funeral procession through Berlin, pausing for several minutes outside the Foreign Ministry, before proceeding to burial in the Luisenstädtischer Friedhof in Kreuzberg, Berlin. It was estimated that a crowd of 200,000 had lined the route. Film newsreels of the event appeared in cinemas around the world.

Gustav Stresemann’s record entitles him to be seen not only as the Weimar Republic’s most successful Foreign Minister, but undoubtedly its most dominant political figure. It is impossible to see German history in the 1920s taking the same course without him. Some politicians make an enormous difference, and he was one of those who did. He was a member of every German cabinet from 1923 to 1929, and the Social Democrats were his most consistent supporters. Stresemann raised Germany from a humiliated and disgruntled foe in 1923 into a diplomatic equal and Great Power again at the time of his death. His achievements as Foreign Minister ended the Ruhr occupation of 1923, contributed to the stabilisation of the Republic, finalised the Locarno and Rapallo Treaties and the Kellogg–Briand Pact, took Germany into the League of Nations, eased Germany’s reparations burdens through the Dawes and Young Plans, and brought the foreign occupation of Germany to an end. Never has the Nobel Peace Prize had a more justified recipient.

Stresemann’s death left a huge void in German political life. He had been a force of stability within a deeply unstable political system, and had gained admiration around the world. There was no speech at the League of Nations in the months following his death that did not begin with a homage to his memory. There was simply no one in Germany or outside it capable of stepping into his shoes.

It is difficult to calculate the exact part his tragic death played in the destruction of German democracy, and the souring of international relations, but he was probably the one Weimar politician who, through the sheer force of his personality, might have saved it, though Stresemann himself thought everything in politics was determined by the state of the economy. Critics of Stresemann have depicted him as an opportunistic and deceitful power-politician with a hidden militaristic agenda, with some even trying to depict him as Hitler in a morning suit. Between the extremes of Dr Jekyll and Mr Hyde, Stresemann was predominantly Dr Jekyll, whereas Hitler was always Mr Hyde. But there is truly little evidence in his private papers or his diaries of Stresemann desiring a war of revenge or territorial expansion beyond restoring the territory lost by Germany under the terms of the Treaty of Versailles, and putting an end to reparations.

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