The German Peace

by Derek Pennington

  “I am in no hurry, James. And I would love to have a drink with you. I found today very interesting.” She had a beautiful smile. James suddenly found himself blushing for no reason.

  They adjourned to the bar. James thought champagne was appropriate. Magda didn’t object. As the waiter delivered the bottle, the hotel porter approached him to inform him that there was a telephone call for him. He could take it in the hotel lobby.

  ‘I wonder what Schneider has forgotten’ he thought as he walked to the phone.

  James got another surprise. On the phone was a Hjalmar Schacht, the German Economics Minister. He apologised for disturbing him, but having been apprised of his mission by General Kesselring, he enquired if James would indulge him by being so kind as to meet with him tomorrow? He would take up less than one hour of his time.

  This was totally unexpected but there was no way a banker could turn down a request from the Economics Minister. They arranged to meet at the Minister’s office at midday the following day. James was excited, puzzled, and apprehensive about this development. Somewhat bemused he went back to Magda.

  The champagne was finished. He had told her of the latest development. They chatted animatedly for another fifteen minutes. It seemed he had somehow enthused Magda with his own excitement. Suddenly he realised that he did not want her to leave just yet.

  He took a deep breath. “Magda, do you have any plans for this evening?” He hurried on before she could answer, “I had planned to start writing my appraisal of yesterday and today’s meeting. But now I find that I am far to wound up to do this. Also I must wait and see what the Economics Minister has to say to me before I have the complete picture. I would consider it a great honour if you would join me for dinner.” He blushed like a schoolboy as he said it.

  With a great smile she accepted. Her apartment was close by. She would go home and arrange with her mother to babysit her daughter. She could at the same time shower and change. She would be back at the hotel at seven thirty.

  James was very, very pleased.

  Back in Berlin, Hjalmar Schacht and his deputy were putting the finishing touches to their proposal for the British banker the following day.

  Magda looked absolutely stunning as she approached James at the hotel bar. The time was exactly seven thirty. ‘Typical German punctuality’ he said to himself.

  After an aperitif at the bar, the waiter escorted them to their table. It was set in a bay window overlooking the garden backed by a small lake. A beautiful setting. Once again they found themselves chatting easily about a range of subjects. ‘This lady is so easy to talk with. So knowledgeable. I could talk to her forever’, thought James.

  Over a superb but simple dinner they enjoyed a bottle of fine German red wine, a pinot noir from the Wurttenberg region. James personally could have managed another bottle but decided in the circumstances, to restrain himself. He was totally relaxed in Magda’s company and did not want to spoil things by over-imbibing.

  Neither of them realised what time it was. It was ten o’clock. The rest of the tables in the restaurant were empty. The waiter was hovering around, obviously wanting them to go. They decided to have a nightcap at the bar. They found a really good German cognac, Asbach. They sipped it appreciatively; each knowing their evening together was drawing to a close. Neither of them seemed to want it to end.

  ‘But end, it must’ thought James. He reluctantly suggested to Magda that he should not keep her out late as she probably had to be up early with a young child to look after. He was stunned when she faced him directly, looked into his eyes, and said quietly, “My daughter is spending the night at my mother’s.” She continued to stare into his eyes.

  James stared back. His mind went blank. This was completely unexpected and he was not prepared for it. Nervously he took her hand. She leaned forward and gently kissed him on his lips. Oh what a sweet kiss! A kiss so full of promise! He felt like he was drowning in emotion. He knew that he was on the verge of a possible life changing moment. A dangerous moment. They had only known each other a matter of hours, yet his instinct told him that this was a woman he wanted to be part of his life. If he wasn’t prepared to accept this, he should end it now. He wanted to love and protect her, not hurt her.

  These and many other thoughts, including guilt, flashed through his mind in seconds. He was a realist. With some reluctance he faced the fact that there was only one decision he could make.

  BERLIN

  There were three of them at the meeting in the office of the Economics Minister. Schacht had introduced the third person as Gustav Muller, the Chairman of Deutsche Bank. This bank had been founded in 1870, originally as a specialist bank in foreign trade. It was now one of Germany’s biggest banks.

  After the usual pleasantries were over, they got down to business.

  “Herr Blackstone, your visit to the Aviation Minister two days resulted in much extra work for me”, Schacht said with a slight smile. “Your proposed aircraft financing business is something I have been pondering on for some time, but my workload didn’t allow me to bring to any conclusion. You have now precipitated things. For this, I thank you.

  Deutsche Bank, the Aviation Ministry, and my Ministry, are in complete agreement with you, that the Americans, with their enormous financial resources, and their great energy, will dominate this sector of commerce if we allow it.

  You have caused a lot of inconvenience to some people over the past twenty four hours. A lot of midnight oil has been burnt to produce a working plan to submit to you.”

  James was relieved. They were not going to cut him and his bank out of the picture.

  It was now Muller’s turn to speak. “I would like to emphasise that we would be honoured to consider the Bradlington Thornberry Bank as a partner, and in many ways, the lead bank, in an ‘alliance’ with the German aircraft industry, German banks, and the German government.”

  ‘High sounding words’ thought James, ‘but what do they mean?.

  Muller continued. “With all due respect to your bank, Herr Blackstone, forgive me if a say that the numbers involved in this particular finance project are enormous. No single bank can manage on its own. Hence our reason for meeting today.

  You may have heard that a new airliner is being developed by Focke-Wulf and Rolls Royce as an Anglo-German project. The potential market for this type of aircraft is US$700 million or more. Focke-Wulf are aiming for at least half of this market, most of which will require finance.

  Something that you may not be aware of, is another Anglo-German development for the next generation of airliners. It will be powered by four jet engines, with greatly increased passenger loads, speed and range, compared to any piston engine aircraft. Deliveries are expected to commence in 1950. The potential market is estimated at not less than US$2 billion.”

  This was an eye opener for James. God bless the Germans. And Jeremy, Katherine and Jamie for putting the thought into my head.

  “The basics of the deal we propose are as follows.

  We, Deutsche Bank, will provide the finance necessary to German aircraft manufacturers, starting with Junkers, for them to produce aircraft. Their own salesmen will do whatever is necessary to secure sales in the face of mainly American competition. As an inducement to purchase, buyers will be offered very competitive finance. This is where you come in.

  All buyers seeking finance would be directed by the manufacturers to your bank. It would be up to you to conclude satisfactory deals. Obviously you will assess the client’s creditworthiness as well as keeping in mind the value of the assets - the aircraft - that form the collateral for the deal.

  At this point I must ask Herr Schacht to advise you of a further interesting development.” Muller took a sip from his glass of water.

  Schacht now continued. “As I previously mentioned, I have had various ideas in my mind in recent years. One of them has now crystallised thanks to you. I will recommend to the Governing Council that we establish a Trade Finance Guarantee Corporatio
n to facilitate exports by providing ‘insurance’ against bad debts and political or country risks.

  The concept is not new. It has been around since the early 1900s. The British, in fact, started such a scheme in 1919, to alleviate unemployment by re-establishing export trade disrupted by the Great War. Germany also had such business before the European War but it was never large.

  This new Corporation will issue a guarantee, backed, of course, by the German state, undertaking to pay a debtor’s obligations to the bank or lender, in the event that the debtor defaults on payment.” The Minister saw that James immediately understood that this was a momentous step in the history of German finance.

  Muller now took over again. “Bradlington Thornberry Bank will assess each deal offered to them on its merit. They will conclude the finance contract and pay the supplier. Fifty percent of the contracts they finalise will be offered for sale to Deutsche Bank. This arrangement will continue until such time as your bank feels it has reached the limit of its investment in this area. Thereafter all deals will be offered to Deutsche Bank. At some future time it is possible we may need to bring in other banks.

  Obviously final details can be worked out later. What do you say, Herr Blackstone? Do we have a deal?”

  What could James say? He was astounded at the scope of what he had started. Wait until Nigel Thornberry hears this!

  The next thirty minutes was a questions and answer time. Then they were finished. James had to get approval at his bank. Muller had to go through the formality of approval by the board of directors of Deutsche Bank. And Schacht had to submit everything to the Governing Council for their scrutiny and agreement.

  The three men shook hands. A tired but exhilarated James finally bid Minister Schacht and Herr Muller farewell. It had been an interesting and productive meeting!

  As before, he felt the need to treat himself to a celebratory drink. One block from the ministry was a small café. He had left Magda there this morning while he attended the meeting.

  After spending a magical night together, even if it was largely sleepless, James recklessly decided to stay another night, in Berlin, and brought Magda with him. They would have an early dinner, then early to bed. He would make a start on writing his report this evening, and finish it early in the morning before he left.

  Last evening they had talked long into the night, but only between bouts of the tenderest and most passionate lovemaking James had ever experienced. He could not get enough of her. She was like no other woman he had ever met. Was it possible to fall in love in two days?

  They had come to an understanding. James regarded it as impossible for him to even contemplate leaving Fiona at this time. They would both meet as often as possible and see how things developed. A mature approach.

  Even so, James felt immeasurably sad when they said goodbye to her at the airport the next day.

  LONDON

  Nigel Thornberry was thunderstruck as James related the events of the last few days, omitting any mention of Magda Reinhardt, of course. The more he disclosed, the more Thornberry regarded him in awe. This was the banking deal of the century!

  When James finished, Thornberry called into his office the other executive directors and asked James to repeat everything, leaving no details out. Afterwards he was warmly congratulated by all, except the previous sceptic, who was now worried that the bank could become financially overstretched if it entered into this arrangement. James privately dismissed the old duffer’s criticisms. If his type had their way, mankind would never have even progressed to using wheels!

  The following morning he had to tell his story once more. This time Thornberry had called the Chairman and the non-executive directors. All were excited. James had a winner!

  The following month a co-operation agreement with Deutsche Bank was signed. James had to undertake many visits to Berlin and Dessau. Not that he (or Magda) complained, of course!

  The first batch of fifty JU52s had been delivered by the Luftwaffe to Junkers. They were scheduled to be ready for delivery into the civilian market within ninety days. Some were destined to be cargo carriers and these would not require much work to convert. The Junkers engineering workshops would process all five hundred of the Luftwaffe aircraft over an eighteen month period.

  The first ten aircraft had already been sold in advance. To China Airways. One of them was being specially fitted out as Chiang Kai-shek’s personal aircraft. James had travelled to Shanghai to sign the deal. Magda had gone with him. It was a hard life!

  ROME - MAY

  Frustrated with his Generals and Admirals, King Victor Emmanuel had fired three quarters of them at the beginning of the year. His action had the desired effect. The remaining senior officers suddenly started enthusiastically co-operating with the Ministry of Defence. There was a meaningful reduction in personnel numbers, and obsolete equipment, (which was most of the armed forces equipment), was scrapped. Orders were placed for the new German tanks. The reduced Italian air force would be re-equipped with the ME262 as soon as they were available. The navy sold their older vessels to Libya. The FAL standard alliance rifle had already replaced the older firearms.

  The economy continued to grow, even if the rate of growth was unexciting. Polls conducted in Albania now showed a greater acceptance by the populace of that country being an integral part of Italy.

  In Libya, King Idris had returned from his self-imposed exile in Egypt and had formally accepted the leadership of his country. Libya had been occupied by Italy in 1912 after a war with Turkey. After the Great War the country had been given a measure of autonomy, with Idris as its traditional leader. However the country quickly descended into civil war, and anticipating the re-occupation of his country by the dictator Mussolini, Idris had gone into voluntary exile in Egypt.

  Now, under the terms of the new agreement, Italian administrators already working in the country, would be reduced gradually over the next three years, to assist the new regime in an orderly handover. The Italians had also offered to train and equip a new Libyan army. They were stunned when this offer was rebuffed. King Idris was no fool and had kept abreast of international developments. He had noted the success of the German advisors in China. He wanted Germany to be Libya’s military mentor.

  King Victor Emmanuel was satisfied with the progress that had been made to date. He was determined to take an economically stable and militarily strong Italy into the European Alliance before he died.

  OSLO - JUNE

  The long awaited general election was over at last. The final results were eagerly awaited in Germany and across the European Alliance, as well as in Norway.

  The country had been governed by the Norwegian Labour Party since 1936, including the brief time they had been the government-in-exile in London. The Prime Minister during that time had been Johan Nygaardsvold, who had held great popular appeal but had later been tarnished by the lack of Norway’s military preparedness at the time of the German invasion in 1940. Nygaardsvold had accordingly considered himself to be only a caretaker Prime Minister until Norway held new elections.

  A review of the Norwegian constitution had been commissioned and, despite apathy amongst the electorate, and some controversy, it had been passed into law at the beginning of the year. The major changes were in the eligibility of voters, and the establishment of a new office of government and political accountability.

  During the period the constitution was being re-written, the authors were bombarded by all and sundry, from crackpots to would be politicians, and anyone who thought they had a contribution to make. The most persistent and tenacious of these was a German professor of Sociology and Philosophy, Otto Berger.

  Berger had drawn attention to a dire need for protection of a country’s population against unscrupulous, corrupt, incompetent or self-seeking politicians. One only had to look at Hitler, Mussolini, and Stalin to understand this. Other prime examples were the hugely inept French politicians of the 1930s, and the ongoing shortcomings of the Greek pol
itical system. This can happen again, he warned.

  Professor Berger proposed a radical change in voting systems.

  An accepted definition of democracy was that every citizen had the right to vote, and that there should be an absence of hereditary or arbitrary class distinction or privilege among voters. Berger did not dispute these points, but submitted that they were open to interpretation.

  His argument was that all citizens are not actually equal. Some are more intelligent than others, some work harder than others, and others generally contribute more to their country over their lifetime. This is an indisputable fact. Why should they not have a greater say in which government runs the country?

  He suggested a qualified franchise. Yes, all citizens of twenty one years and older would have the right to vote. But, those with higher education qualifications would be entitled to an extra vote. Similarly, anyone paying income tax of an amount more than four times the national average would also get an extra vote.