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* Compare Richard Schröder: “Deutsche Rechtsgeschichte” (History of German Law.)
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[Page 82] They go so far as to demand that stolen articles, which are found in the hands of Jewish “receivers”, shall not be reclaimed by the lawful owner. This principle has already been enunciated in the Talmud, and it has been repeatedly corroborated, especially in the Middle Ages, by the privileges given to the Jews. According to Jewish perception, the right to buy ranks higher than the right to own, and the relative legislation aims almost at giving privileges to receivers of stolen goods!
[Page 83]
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VIII.
The Stock-Exchange.
The Jewish World of Trade and Mobilisation achieves its greatest triumph on the Stock-Exchange. The Stock-Exchange might well be — although Sombart does not put forward this claim on behalf of the Jews — in its present day form an invention of the Hebrews in every respect. Originally it was merely the meeting-place for merchants, where they bought and sold their goods according to sample. All trade on the Exchange related originally to “effective” goods, that is to say, to goods, which actually existed, and of which, samples had to be produced. Even today business of this kind is still transacted on the Exchange, but the extent of the trade there has increased considerably. Not only are goods bought and sold there, which are really warehoused somewhere, but also goods, which time alone can produce — yes, goods even, which do not exist and which never will exist. It is justifiable, under certain circumstances, to secure in advance, delivery of goods for a future date, and therefore purchasecontracts on the Exchange, which refer to a future delivery of the goods, are comprehensible.
The manufacturer, who has pledged himself for months in advance to supply certain of his customers with certain wares at regular intervals, is naturally interested in also securing the necessary raw material in advance. He accordingly buys “on term”, that is to say: he enters into contracts today at fixed prices, which contracts shall only become “effective” at a future date or “term.” Trade of this kind has nothing actually objectionable in itself, although it was simply forbidden on the sound mercantile exchanges of the olden times. But, at any rate, this method of doing business opened the path to unlimited speculation. By this means large quantities of goods can be bought and sold, which are never delivered, and which are never intended to be delivered.
[Page 84] Buyer and seller make a bet, so to speak, as to whether a commodity at some future date will cost more or less than at the present moment. Settlement is effected on the following lines, that one party has to pay out, on the appointed date, the difference between the arranged price, and the price quoted, for the day in question, on the Stock Exchange list.
Thus this “ term-trading” becomes simply a business of differences, and does not rank any higher than gambling and betting. This game of “differences” might appear harmless if it were a private affair, and did not exert its influence upon the genuine fluctuation in the prices of goods. For, when business in “differences” is undertaken to a far greater extent than the real business purchases, the basic price, at which the business in “differences” has been concluded, must, of necessity, influence the price of the actual goods. The fixing of the daily price results from the general average of the prices, at which the purchases have been concluded, and, generally speaking, one is not able to say whether the latter represent genuine sales of goods, or merely a gamble in “differences.”
It can also be the case that someone buys himself free from his contract to deliver the actual goods, by paying the price difference. Accordingly there is no hard and fast line between genuine purchases and mere speculations in prices.
The essence of the so-called “ speculation” consists in making sham purchases on the Stock Exchange so as to create an artificial influence on the movement of prices; and, apart from the fact that this gambling in “differences” ruins many a person, it is thoroughly repugnant to the sense of sound political economy. Strictly speaking, every purchase, which does not aim at satisfying the requirement of the moment, but has rather the object of utilising the occasion to lay up cheap goods for a future date, is of a speculative nature. It is more usual, however, to understand by speculation on the Stock Exchange, sham purchases and the trade with imaginary values, as opposed to trade in real values.
[Page 85] The machinations, connected with unsound business on the Exchange, and which first appear on the Produce Markets, assume a more pronounced character on the Stock and Share Market. Here, along with the national loans, it is particularly the railway-stocks and the shares in industrial undertakings, which form an important object of trade. The computation of the value of the share depends, generally speaking, upon the rate of interest paid during recent years, which is not by any means an infallible guide as to what the returns will be in the future. The art of the guiding factors, on the Stock Exchange consists in creating, above all things, a favourable atmosphere.
Reports are inserted in the newspapers in order to cast a more or less favourable light upon an undertaking, and to anticipate a higher or lower dividend as the case may be. The public is thus seduced into buying or selling the paper securities in question. Certainly a preliminary condition to the successful carrying-out of this manoeuvre is that the public press puts itself at the disposal of the powers in question. This is easily managed. Some of the matadors of the Stock Exchange are themselves owners of newspapers, or are connected with the same as secret partners, others again, through the agency of influential banking-firms, procure favourable notices from the press by making considerable payments to the latter in the shape of orders for costly advertisements. By far the largest portion of the public press, in all countries, is actually under the influence of the magnates of the Stock Exchange, and to this extent Sombart is correct when he states that the Jews took a substantial part in the development of the modern Stock Exchange.
But business on the Stock Exchange only yields a sure result when it is transacted by secret collusion, that is to say by gangs or bands. If individual always opposed individual on the Stock Exchange, the formation and quotation of prices would pursue an even and reliable path, and profit and loss would be more or less dependent upon chance. It might then well happen that what was lost one day might be regained on another.
[Page 86] Matters take a very different course when a secret organisation of certain brokers exists, and when all the partners in the same, who have a mutual understanding, operate simultaneously according to a prearranged plan. In a case of this kind, the price is like a ball, which can be tossed about at the pleasure of this organised clique.
Let anyone represent to himself the following position: the number of shares actually on the market are limited. One knows, for instance, the exact number of shares in any undertaking. If now, several of the larger banking firms and stockbrokers are working in conjunction with one another, they can very easily ascertain what number of the shares of any undertaking are held by the public, and what number are in the hands of the operating banks and brokers. The aim and object of the secret confederates — we will make use of a Jewish expression and call them the “Chawrusse” — consist, as one can easily understand, in buying up paper securities at a low price, and in selling the same at a high price. And this business is effected in the simplest way possible. As soon as any particular paper security is held to a very large extent by the public, all that is necessary to do is to arouse suspicion about the same. The view is spread abroad by means of suitable and cleverly-worded press-notices, that the security in question has no prospects, and that only a poor dividend can be expected. At once a number of the holders endeavour to get rid of the shares in question, and the price steadily falls as the shares are offered for sale. The large stock-brokers help in the process by instructing their agents on other stock-exchanges to offer, whatever they hold of the security in question, at
declining prices. They do not run any risk by doing this, for nobody wants to buy the discredited shares. Thus, by reason of these carefully planned and continued influences, the price of the paper security in question falls, day by day; and then, and then only, when a heavy fall in the price has set in, does the “Chawrusse” begin, in all secrecy, to carry out their purchases. They buy up the shares, at the greatly depreciated price, and know how to maintain it at this low level until they hold the greater number of the shares in their own hands.
[Page 87] Then the page is at last turned over. All at once, the “ well-informed” financial press announces that the former suspicions, with regard to the prosperity of the undertaking, were without any foundation, and that it promises, on the contrary, to pay an excellent dividend very shortly. Immediately the price of the shares begins to “recover”, to use a stock-exchange expression, and here also assistance is given by the instigation of a zealous but absolutely artificial enquiry for the shares. But, for the time being, the “Chawrusse” withholds all the “material” i.e., the shares. The tension, due to the growing demand and the scanty supply, contributes to a further rise in the price, and it is only when the “Chawrusse” consider that their profit is large enough that they begin to unload their stored-up shares at the enhanced price. If, after the course of several weeks or months, as the case may be, they have relieved themselves of enough of their treasure, they turn the point of the spear in the opposite direction. They suddenly make a forced sale of the remainder of their shares, and arrange that the financial press shall publish articles to correspond; the price gives way, and the old game begins once more. It is instructive to note that, in these transactions, it is invariably the “Chawrusse”, who gain, and the dear Public who are duped.
Some simple-natured people look up with respectful awe to the ingenious heads, who direct our stock-exchange affairs, and who, in spite of all fluctuations on the Bourse, always contrive, with “miraculous certainty,” to secure the advantage.
The former imagine that an almost superhuman capability is requisite to survey the situation on the money-market aright, and to grapple with the circumstances as they alter. Good, trusting folk! If they only knew how it was done they might well say, to paraphrase an old saying:
“One cannot believe what a little understanding is required to rule over the stock exchanges of the world.”
[Page 88] The indispensable condition for success, however, is combined action: the Chawrusse. He, who ventures into the combat on the StockExchange as a free-lance, must not be surprised if he emerges from the struggle stripped of all his feathers. Success is assured only to organised bands. It is a well-known fact that, in every game, if two or more of the players have a secret understanding with one another, they always gain the advantage, and “let the others in.” They know how to communicate by secret signs, and play into one another’s hands. On this account also, one of the conspirators can attach himself to the losing side, without the least apprehension, for he knows that he will receive his share of the profits eventually from his fellowconspirators.
This is the secret of the Stock Exchange. And it is only the elect of the people of Israel, who form the conspirators of the “Chawrusse.” The transactions of the Stock-Exchanges, at the present day, are nothing less than swindling; the artificial quotations are made by the “Chawrusse,” supply and demand are artificially created, and all this takes place with the sole object of fleecing the unsuspecting, productive nations by the continual rise and fall of the Stock Exchange quotations, and of adding incessantly to the wealth of Israel.
And this important secret, of which Sombart unfortunately has betrayed nothing to us,* is the secret combined action of the Hebrews, of which we spoke on page 39 and the following pages, and which extends over many other domains as well. This secret hand-in-hand working has always been the chief strength of the Jews, and which has naturally always given them an advantage over all sound, straightforward traders. We are not at all astonished when we read in Sombart:
“ Already in the year 1685 the Christian merchants of Frankfort were complaining that the Jews had gained possession of the entire broker- and bill-discounting business;”
and that in the year 1733 the Hamburg merchants lamented that:
“The Jews were entirely masters of the bill-discounting business, and had out-stripped our people.” ---------------------
* Anyone, who requires further information on this subject, can find enlightenment in Kolk’s “Das Geheimnis der Börsenkurse” (The secret of Stock Exchange quotations), Leipzig. Herm. Beyer 1893, and also in the Germanicus Pamphlets. See page 34.
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[Page 89] Let us then grant to the Hebrews the glory which Sombart claims for them; i.e., of being inventors of trading in “Futures” and of being the fathers of speculation (“Jobbing”) on the Stock Exchange. And this questionable practice is introduced by the Hebrews wherever they settle. During the 13th and 14th centuries, when they were present preponderatingly in Northern Italy*, Sombart informs us that stockjobbing was, at that time, in full swing in Genoa, and that speculation, in the form of “futures” and “differences”, was carried on to a considerable extent at Venice — so much in fact, that in the year 1421, a prohibition had to be issued against trading in bankers’ bills.
The mania for speculation accompanied the Hebrews to Holland as well, where, in the course of the 17th century, the shares of the East India Company furnished the material for an arrant piece of stockjobbing. It is there where Sombart seeks the source of the modern Stock Exchange speculation.
Here also was issued a proclamation of the States General in the year 1610, forbidding, “the sale of more shares than one actually possessed.” This prohibition was followed by many others, whereby Sombart remarks: “naturally without having the slightest result.” Our author (Sombart) boasts that the Jews invented dealing in shares. A questionable glory indeed, for, in a report from the French ambassador at the Hague to his government in the year 1698, the former expresses himself in an extremely outspoken manner:
“ the Jews have control of the entire business in paper securities on the Stock Exchange, and regulate it as they see fit”; and, according to the same report, “the prices of shares fluctuate so incessantly that they give rise to transactions several times in the course of the day, a kind of business, which rather deserves the name of gambling or betting, all the more, as the Jews, who are at the bottom of all this activity, carry out masterstrokes of artifice, by which the people are again and again ‘let in’ and made fools of.”
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* The business of loaning paper securities (Lombardising?) which takes its name from the Lombards, dates from this period.
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[Page 90] Sombart informs us, with reference to the activity of the Hebrews in England, during the reign of William III. (1689— 1702), that the chief negotiators of the first loan were Jews; they were ready at hand with their advice when the Orangeman began his reign. The rich Hebrew, Medina, was banker to the English Commander-in-chief, Marlborough (1650—1722), and paid the latter a fixed yearly salary of £6,000 (120,000 Marks), for which he acquired the right to receive all the war intelligence direct from head-quarters.
“ The victories of the English army brought as much profit to him as they reflected glory on the soldiers of England.” (Sombart page 106) — “All the tricks of raising and depressing prices, false news from the theatre of war, the pretended arrival of couriers, the secret coteries on the Stock Exchange, the entire hidden machinery of Mammon, were well known to the first fathers of the Bourse, and were utilised by them to the utmost extent.”
We learn concerning Mannasseh Lopez, the body-physician of Queen Elisabeth of England, that he made a large fortune by circulating a false report that the Queen was dead, and by buying up the public funds which consequently fell in value.* Nathan Meyer Rothschild of London had reports sent to him in Brussels, by Jewish spies,
concerning the issue of the battle of Belle-Alliance, so that he could travel back with the news to London by express post and special ship. On his arrival he circulated a false rumour concerning the result of the battle, which was the immediate cause of a tremendous drop in the prices of English and German paper securities. He bought up the depreciated securities secretly in enormous quantities, and, when 24 hours later, the London Stock Exchange learnt the true issue of the battle, and, at the same time, that Rothschild had made fools of them, he — Rothschild — was many millions richer.
Sombart allows that John Law (1671 — 1721) the author of the notorious fraud in the shares of trading companies, may have been a Hebrew, and that his real name was probably Levi.
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* He ended on the gallows, a fate which he incurred for betraying the English interests to Philip II of Spain. (Drumont: “La France juive.”)
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[Page 91]
Of kindred spirit to these Jewish “statesmen” was the notorious “Demon of Württemberg”: Süss-Oppenheimer (hanged 1734). The Hebrews also introduced the traffic in shares into Hamburg, in the 18th century, and carried it on to such an outrageous extent, that the Hamburg Council issued a proclamation, in 1720 prohibiting the practice. Today, it is represented as being the narrow view of reactionary circles to speak of business on the Stock Exchange with anything but the most profound respect; but, as Sombart himself confesses, this view of those, who are called today “Provincials” and “Agrarians”, was, in the 18th century, the settled opinion of the sound merchant. During the debate upon John Bernhardt Act in the English Parliament in 1733, the “infamous practice of stockjobbing” was condemned unanimously by all the speakers.
What have not our Hebrews accustomed us to in the meantime!
Sombart has already said (P. 112) of the time in question: “ Public debts were regarded as the shameful side — ‘Partie honteuse’ — of national life. The best men saw, in the rapidly advancing indebtedness, one of the worst evils, which could be inflicted upon the community.”
The Riddle of the Jew's Success Page 10
