Germany was saddled with making reparations payments for damage she caused in WWI. The cause of that war and the method of raising money with which to pay were intimately intertwined. How?
Knowledge of the Opium Wars invariably comes as a surprise to most victims of pre-Internet government schooling. But just before Victoria was crowned Queen of England, China banned opium trading and ordered the traders to leave. Lord Palmerston soon oversaw military operations to force China to repeal its opium prohibition. The war preparations sucked British investment capital out of These States and a depression set in shortly after 1837, when prohibitionist policies in China first affected British commerce.** Modern weapons crushed all resistance and the Chinese were forced not only to legalize the only really addictive drug warranting the nomenclature, but also to pay for the losses suffered by their attackers. This rankled. The Boxer Rebellion was a failed rematch, but the Revolution of 1911 finally restored control of their ports to the Chinese, and the ban produced a huge opium glut affecting the economies of the producing nations–The Balkans.
That almost all the opium containing 12 to 14% morphine is produced between Italy and Turkey is an inconvenient fact handily omitted from government school curricula. Serbia, Montenegro–the entire mountainous area from Slovenia to Bulgaria down to Greece was shot through with opium plots feeding chemical plants in Austria-Hungary and Germany. There, the morphine was extracted and acetylated into patented German Heroin™. Immediately after it became clear Chinese customs agents could no longer be bribed or bullied, price-cutting and competition for dope markets exploded into war in the Balkans, and escalated smoothly into World War I. This too is a surprise to people educated in government-subsidized classrooms, but the mechanism was obvious in the year 1923, when a heroin epidemic in United States called into question the wisdom of the government’s classification of light beer as a felony narcotic per the 18th Amendment. But alcohol prohibition in America was a windfall for the German drug industry. According to The Norwalk Hour:
This country has been a dumping ground for the large quantity of drugs manufactured abroad since the end of the war. And it is against this production of drugs abroad for illicit sale in this country that a movement has now been launched.
Germany, previous to the outbreak of the war, was the chief alkaloid manufacturing country in the world. The supply of morphine, heroin and other alkaloids of opium for the Occident came largely from her factories. In 1915 and thereafter the Allied countries found themselves short of opiates, the medical treatment of hundreds of thousands of wounded having drained surplus stocks the world over. Manufacturing laboratories sprang up. At this time poppy growing in India, Persia and China increased tremendously, and in India it receives governmental encouragement.
There you have a historical recitation of These States suddenly discovering how the Chinese had felt since long before the Civil War. The parallels with the situation endured by the Celestial Empire continue, for Britain, after losing America, transformed India into an opium farm with an annual output worth $19 million in gold. That entrenched drug market brought England and France (which ran opium regies in Cochin-China) into war with Germany. The war necessitated loan-taking in the USA, whose President Coolidge insisted on October 5 that the loans be repaid. Hence, again, the transfer of British liability to the vanquished, this time Germany. Germany’s reaction was to evade reparations payment by inflating its currency into worthlessness.
Why is this relevant? The prohibitionist infiltrators that caused the Gee-Oh-Pee to try and fail to keep light beer a felony in 1932 never relinquished their hold on the party. During the Reagan-Bush years, when South America was exporting relatively harmless and nonaddictive cocaine to These States and Europe, a flurry of drug testing laws and the exhuming of Herbert Hoover Administration asset-forfeiture legislation triggered a major crash once traders perceived the Depression was inevitable. Like Germany in 1923, Brazil went into hyperinflation, and its president was deposed by impeachment (much like the September, 2016). George Waffen Bush repeated this Herbert Hoover in his second term. Bush’s Executive Orders packed the government with religious fanatics. Together they pushed prohibitionist asset forfeiture of billions, again causing damage to the US and global economies in the trillions of dollars. Today’s Republican platform reads like Mein Kampf, only with “drug” search-and-replacing “jew” and “America” replacing “Germany” throughout. Both the Republican and Democratic parties disguise the fact that prohibitionist fanaticism by banning beer attracted opiates during prohibition. Prohibition enforcement, caused the Crash and Depression, and Herb Hoover’s policies supported the rise of National Socialism. This led to more war, and finally major Crashes in 1987, and just recently in 2007.
I vote Libertarian secure in the knowledge that there is nothing the other looter party could do that is worse than Republican economic disasters. Furthermore, my LP spoiler vote has 6 to 36 times the law-repealing clout of a vote wasted on the Kleptocracy.
** The Sydney Morning Herald of May 15, 1837 p. 3 contains the unlinkable article labeled CHINA. Click HERE to go to that page and see the Edict expelling all the foreign opium traders from Canton at the lower right. There is no date, but it is likely the thing was issued December, 1836, when the US economy was already in free fall and covetous of Mexican gold in California. The first news in English took six months to find publication in the newspapers. We’ll be blogging on that shortly.
Find out the juicy details behind the mother of all economic collapses. Prohibition and The Crash–Cause and Effect in 1929 is available in two languages on Amazon Kindle, each at the cost of a pint of craft beer.