Tuesday, 31 December 1929

Berlin:  

President Paul von Hindenberg files suit against the newspaper Der Angriff (The Attack), founded and published by nazi party leader Joseph Goebbels, for an article published two days ago entitled, “Is Hindenberg still alive?”  The article claimed that Hindenberg had not voted against the Young Plan because “he always does what his Jewish and Marxist advisers tell him to do,” and that “nobody should be under any delusions concerning him.” 

Paris:  

Authorities seize three Italian communists with explosives.  Their papers outline a plan to assassinate Italy’s delegation to the League of Nations at an upcoming meeting in Geneva.

London:  

Not four weeks after Great Britain restored diplomatic relations with the Soviet Union (see Dec. 4), a New Year’s message from the Communist International (Comintern) to workers in England is causing a stir.  The message appears in The Daily Worker, a new communist newspaper in England, describing itself as “a new and powerful weapon in the hands of the British working class.”  This doesn’t sit well with the British government, which remains wary of communist agitation within its borders. 

Monday, 30 December 1929: German Unemployment Hits 2 Million

Germany:  More bad economic news: reports indicate that unemployment, at 2 million, is up 82% from a year ago, an increase of 900,000.  Most of the unemployed – 1.4 million -- receive some form of government assistance, draining the government’s finances.

United States:  More impact from the economic downturn: American funds invested abroad are down 22 percent from prior year.  American investment in places like Germany is declining right when they need it most.  

Sunday, 29 December 1929

Berlin:  More bad economic news: reports say stock prices on the Berlin exchange have fallen 27% this year.  

Saturday, 28 December 1929

China:  

Reports indicate that, in the wake of the Russian invasion of Manchuria and the recent flareup in China’s civil war, regional warlords are once again on the rise.  Yen Hsih-shan, for example, is in virtually unchallenged control of the Shansi province in northern China.  Nationalist government leader Chiang Kai-shek holds firm control only over a relatively modest portion of eastern China.

Berlin:  

The United States and Germany conclude negotiations for Germany to make war debt payments to the U.S. separate from the Young Plan.  The U.S. was interested in this deal to give it greater latitude relative to its participation in the Young Plan, and to circumvent some provision of the Young Plan that the U.S. perceived as favoring France’s repayments over others.

Friday, 27 December 1929

Washington:  

Secretary of State Henry Stimson releases a report clearing Italian officials and residents in the United States of inappropriate activity relative to fascism.  He also expresses appreciation to the Fascist League of North America for disbanding.  “The investigation of the incidents referred to in the article in Harper’s magazine [see 26 October] has been completed by this department, and it has not revealed any activities on the part of any resident in this country of Italian extraction or on the part of any Italian officials which were directed against this government or against its institution.”

Rome:  

Pope Pius XI again complains of ill treatment by the fascist government of Italy, and of fascist interference in church publications.  During his Christmas address to the College of Cardinals, the Pope says the Italian government censors church newspapers, erects monuments which the church finds insulting, and has published a book allegedly “explaining” the relationship between church and state, but with which the church disagrees.  He says Catholic youth organizations are falsely accused of political involvement, but he knows this is not so, because the church has given them strict orders not to do so.  Meanwhile, the Pope says, “irreverent publications,” which attack the church, are given free reign to publish without hindrance.  The pope’s speech was not reported in Italy’s fascist newspapers. 

Tokyo:  

Police arrest 180 Korean students at area universities on charges of inciting recent student unrest in Korea as part of a “secret society of communist tendency.” 

Paris:  

Parliament approves a bill near the end of the session appropriating the equivalent of US$40 million in 1930 for construction of the line of forts proposed by Defense Minister Andre Maginot earlier this year, to protect France in the direction of Germany.  The engineering section of the army will get roughly 75% of the funds, which is itself only a portion of the estimated 3 billion francs the government agreed would need to be spent on the fortifications. 

China:  

China rejects Japan’s nomination of Torikichi Obata as its Minister to China.  China’s objection is based on the fact that Obata was Charge d’Affaires in Peking in 1915 when Japan presented China with its now-infamous “Twenty-One Demands,” which asked for humiliating concessions from China.  Japan is refusing to withdraw Obata’s nomination and has asked China if it is fully aware of the consequences potentially arising from the rejection.

Thursday, 26 December 1929

Poland:  News reports say Russian Catholics secretly crossed the border into Poland on Christmas Day to attend church, given the persecution the church has come under in the Soviet Union.

Wednesday, 25 December 1929

Today is Christmas.

Berlin:  More evidence of the economic downturn: the Associated Press reports that “community Christmas trees” are becoming popular in Germany this year, as people have less money for Christmas celebrations, including having their own Christmas trees.

Tuesday, 24 December 1929

Moscow:  The communist government has banned Christmas observances.  Christmas will be a work day like any other.

Mexico City:  The government expels 11 communists for an assassination plot on former president Plutarco Elias Calles.  The 11 are forcibly put on a ship bound for Cuba.  

Monday, 23 December 1929

Berlin:  

Dr. Paul Moldenhauer is appointed Minister of Finance to replace Dr. Rudolf Hilferding.  Moldenhauer was previously Minister of Economics.  Robert Schmidt will replace him in that post. 

Molenhauer’s appointment pleases industrialists and bankers.  He is a member of the people’s party (as is Foreign Minister Julius Curtius), a party friendly to business interests, and is expected to make changes to his predecessor’s policies that these interests will find more favorable.  This also restores the people’s party to four seats in Chancellor Hermann Mueller’s cabinet.

Meanwhile, Alfred Hugenberg, nationalist political leader who lost the Liberty Law vote, reportedly is planning to appeal the law’s defeat to the German courts and to ask President Paul von Hindenburg to proclaim the measure law.  He claims that only a majority of those who actually voted on Sunday was required for the Liberty Law to pass – not a majority of registered voters.  It’s a grasp at straws.  Neither the court nor Hindenburg is expected to give his argument any merit. 

Brussels:  

A young man, variously said to be an anarchist or a communist, is arrested on charges of plotting to bomb a train carrying the king and queen of Belgium.  The royals’ daughter, Princess Marie Jose, plans to marry Crown Prince Umberto of Italy in January.  The bomb plot was in protest of Italy’s fascist government.  A newspaper article in Brussels says the Belgian Prime Minister, Justice Minister and Defense Minister had all recently received threats as well that they would be killed unless they stopped the wedding.

 

Manchuria: 

Japanese reports say that ethnic Mongolians in the Barga district of western Manchuria are considering forming a new nation -- with Soviet Russian encouragement and under Russian influence – from territory that Russia invaded last month. 

Sunday, 22 December 1929: Germany's Liberty Law is Defeated at the Polls

Berlin:  

The Liberty Law is defeated at the polls as expected.  Nationalist politician Alfred Hugenberg’s proposed measure to reject the Young Plan in favor of ending war debt payments altogether is supported by less than 6 million voters, or 14%.  Still, that’s an increase from the roughly 10% who signed the petition earlier in the year that brought the measure up for a public vote, and it surprises some observers, who hadn’t expected the vote to be any higher.  Some places show marked increases: in Potsdam, for example, 45% more people vote for the Liberty Law than signed the plebiscite.  Dusseldorf, a socialist and centrist stronghold, sees a 35% increase in voters for the measure.  Pfalz and Wurttemberg report 100% increases. 

The measure, sometimes also referred to as the law “against the enslavement of the German people,” would also have prosecuted German officials who favored reparations payments, and would have renounced the war guilt clause in the Treaty of Versailles.  Voting is relatively quiet, although some clashes are reported in Berlin, including one polling place having all its ballots stolen at gunpoint. 

Khabarovsk, Russia:  

China and Russia sign an agreement to restore Russian control of the Chinese Eastern Railway, which was a major focus of a Russian invasion of Manchuria last month.  Prisoners will be exchanged, troops will be withdrawn, and China additionally says it will disband the White Russian military organizations operating in Manchuria. 

Manchuria:  

In a related development, Japan’s Rengo news agency reports that some 200 Japanese nationals living in Manchuria, who were caught in the fighting during Russia’s invasion, are suffering cold, hunger and other hazards in the wake of the conflict.  Meanwhile, in Shanghai, reports are that Japan’s Dempo news agency has displeased the nationalist government, allegedly spreading “ill reports specifically intended to undermine public confidence in the nationalist government,” according to a foreign office announcement, which also said the government had requested Japan’s legation in Peiking to “restrain these propagandists.”  The news agency’s telegraph and radio privileges are withdrawn. 

New York:  

The Fascist League of North America disbands.  The organization, which formed primarily in Italian-American communities around the country, received mixed reactions from the Italian government and was viewed with ambivalence by the U.S. government.  A Harper’s magazine article on Oct. 26, entitled “Mussolini’s American Empire,” claimed the FLNA was raising “soldiers for fascism.”  This caused an uproar nationwide, including Congressional calls for an investigation of the FLNA.

League President Count Ignazio Thaon di Revel says that the Harper’s article and ensuing calls for investigation had nothing to do with it.  Rather, the league’s work in “contributing to the enlightenment of the American public pertaining to the ideals of fascism” has been accomplished.

To view a photo of an FLNA march.

Saturday, 21 December 1929

Moscow:  Dictator Joseph Stalin celebrates his 50^th birthday.  “There could be no doubt, comrades, that in the future as in the past, I will be ready to give to the cause of the laboring class, to the cause of the proletarian revolution and to world communism all of my strength, my ability and if necessary all of my blood, drop by drop.”  No mention of other people’s blood. 

Friday, 20 December 1929

Vienna:  

Emile Vandervelde, Chairman of Labor and Socialist International, an international organization of socialist parties, warns Austria that it supports its socialist comrades in Austria, and advises the Austrian government to take seriously British Foreign Minister Arthur Henderson’s warnings against a nationalist coup. 

Helsinki:  

Parliament approves the proposal by Prime Minister Kyosti Kallio, made last week, to amend the country’s “association law” to curtail the ability of communist groups to spread propaganda.  The vote was 98-78.  The national government is expected to use the new law to disperse communist activities, and possibly even dissolve the communist party in parliament.

London:  

Great Britain officially resumes diplomatic relations with the Soviet Union.  But the formalities have not gone smoothly.  Earlier in the month, Britain’s new envoy to Russia was received “cooly,” prompting a torrent of rhetoric that relations could never be normal with a country so bent on propaganda.  Today, King George refuses to receive the Soviet ambassador, owing to the Soviet government’s assassination of Czar Nicholas, King George’s cousin. 

Berlin:  

Finance Minister Rudolph Hilferding resigns anyway.  He has been under fire for weeks – and at odds with Reichsbank President Hjalmar Schacht – over a series of financial reforms approved by the Reichstag.

Photo of Rudolf Hilferding.

Paris:  

The Saar negotiations between Germany and France, which started three weeks ago, adjourn for the Christmas holiday with no progress.  It’s not clear the negotiations will even resume.

Thursday, 19 December 1929

Berlin:  

Another economic crisis confronts the cabinet of Chancellor Hermann Mueller and threatens the post of Finance Minister Rudolf Hilferding.  Germany still needs an emergency infusion of cash to pay its bills through the year.  Hilferding has failed over the past several days to get this loan from the U.S. banks that had expressed interest in it, except on terms that would have required his resignation.  But the cabinet agrees today to introduce and support a bill in the Reichstag for a 450 million mark amortization fund, which was a condition that several large German banks had placed on lending to the government.  As a result of the bill, Germany will be able to gets its emergency loan from domestic banks, Hilferding doesn't resign, and Germany breaks off the negotiations with the U.S. banks.

But on the same day, more news illustrating Germany’s worsening economic situation surfaces.  A government estimate says that due to rising unemployment, a housing shortage and other economic duress, some 35-75,000 children will face some form of economic hardship this Christmas season, many going hungry at least part of the day. 

Elsewhere: 

London:  8,000 people, representing different religions and denominations, gather at Albert Hall to protest the persecution of religion in communist Russia. 

Manchuria:  The Chinese Eastern Railway, over which the recent Russian invasion of Manchuria was waged, is reopened.

Wednesday, 18 December 1929

Berlin:  Two people are killed in riots as the unemployed hold demonstrations throughout the country, asking the government for economic relief at Christmastime. 

China:  Nationalist government head Chiang Kai-shek announces that the military revolt in central and southern China is over.  Pockets of communist rebels nevertheless continue to carry out bandit attacks in various areas. 

Tuesday, 17 December 1929

China:  Nationalist government leader Chiang Kai-Shek acknowledges publicly that his government was under serious duress during the recent troop rebellions.  Meanwhile, international observers in Manchuria report that the Chinese government’s control over Manchuria is almost nonexistent.  The province of Kirin, on the border with Korea, is reported to be virtually independent.  

Monday, 16 December 1929

Helsinki:  

The cabinet of Prime Minister Kyosti Kallio asks Parliament for extended powers to curtail the flow of communist propaganda threatening to destabilize the country. 

United States:  

Bad economic news: unemployment jumped 3% just from October to November.  Trade in the auto industry, a major contributor to the country’s industrial output, fell 17% from October to November, and is down 23% from prior year.

Berlin:  

President Paul von Hindenburg confers with Reichsbank President Hjalmar Schacht this evening, supposedly to learn Schacht’s attitude toward the US$10 million loan the finance ministry is negotiating in the United States.  The German advisory board on foreign loans refused earlier in the day to approve a $15 million loan for the city of Berlin from U.S. banks.  But whatever is discussed between Schacht and Hindenburg is not shared publicly.

Saturday, 14 December 1929

Berlin:  

Chancellor Hermann Mueller gets his vote of confidence in the Reichstag that supports his government’s financial proposals, including an emergency loan worth US$100 million and agreement on financial reforms.  The margin is 222 to 156, with 22 members of the people’s party abstaining.  It comes to light today that the political parties who had been opposing Mueller’s financial measures agreed “in principle” to support them until the government’s current financial crisis passes. 

Meanwhile, more bad economic news surfaces: a new report says unemployment has jumped 100,000 in one week, and is 500,000 higher than same week last year. 

Libya:  

Italian forces take the city of Sebha from Libyan resistance fighters.  

Friday, 13 December 1929

Berlin:  

The capital is astir with late-night political deal-making, as President Paul von Hindenburg gets involved in the crisis involving Chancellor Hermann Mueller’s financial reforms.  Bringing together the heads of the Reichstag’s political parties for an annual state dinner, Hindenburg reportedly urges them to agree on the financial proposals.  The Mueller cabinet then holds a midnight closed-door session, details of which are not disclosed.  But afterward, leadership of the socialist and peoples parties have reportedly come around to agree to vote for Mueller’s proposals. 

Madrid:  

Gen. Miguel Primo de Rivera, dictator of Spain for the past six years, announces that some form of constitutional government will be reinstated in Spain next year.  Whether this will involve his resignation, or just some reduction in his powers, is unclear, but a change has been rumored for months, as his economic programs have become increasingly unpopular, especially with the military, which has supported his rule.  Rivera’s resignation is expected to unleash a wave of competition over what kind of government will follow – mainly between monarchists and republicans.

Elsewhere: 

Prague:  27 communist delegates are thrown out of parliament and banned from several future sessions after they repeatedly disrupt proceedings with sirens, shouting and whistles, and refuse calls for order.  Fist fights break out before police haul off the disorderly delegates. 

Austria:  Bad economic news: unemployment jumps 33% in one month.

Ostend, Belgium:  In one respect, at least, it promises to be a Merry Christmas for Great Britain.  The last of her troops to leave the Rhineland, after 11 years of occupation, embark here for Dover, England, and home. 

China:  The tide turns in the civil war.  Rebel forces scatter on multiple fronts as nationalist government head Chiang Kai-shek suppresses the rebellion and restores his hold on the government.  In Canton alone, 3,000 rebel soldiers are dead and 2,000 captured.  The river there is said to be choked with corpses.

Thursday, 12 December 1929

Germany:

Berlin:  Chancellor Hermann Mueller presents his package of financial reforms to the Reichstag today and calls for a vote of confidence in his government.  The package would mean an emergency increase in the tobacco tax and unemployment insurance contributions, as well as borrowing 78 million marks immediately to cover the country’s spending needs, which Mueller says would run Germany’s deficit to 1.3 billion marks at Dec. 31.  But he says without the loan, Germany will default on its obligations before month-end.  It’s a high stakes game: the socialist, peoples and centrist parties have reportedly already informed Mueller they will not accept the program. 

However, in the evening, Reichsbank President Hjalmar Schacht communicates to Finance Minister Rudolf Hilferding that these measures won’t be enough.  Schacht says U.S. banks contemplating loans of 400 million marks to Germany under the Young Plan won’t go through with them unless more is done to shore up the nation’s finances, and predicts that U.S. banks will not loan Germany money in its current economic state.  This only adds to the furor he created with last week’s criticisms of the Young Plan.*

Probably in an attempt to coerce reluctant legislators into voting for the plan, Mueller paints a dire (though not inaccurate) portrait of the country’s finances, saying Germany has a “catastrophic" cash situation.  But his efforts may have had the unintended consequence of fulfilling the very predictions made by Schacht, as press reports out of the U.S. state that the banking community took “deep interest” in Mueller’s comments – if anything, the comments made their reservations even greater.  “Should the government not obtain a clear vote of confidence in the Reichstag meeting Saturday, the meeting of The Hague conference is questionable unless a new government is formed in short order,” Mueller says. 

Meanwhile, the storm started by Schacht’s comments among bankers and industrialists in Germany is spinning up.  Meeting in a special session on the same day in the same city, the League of German Industrialists cheers Schacht’s comments, and thanks him for making them.  One attendee sums up their views on the situation thusly:  “Talk is often heard in foreign countries of the German miracle, and our newspapers here try to convince us of this miracle.  To me, the German miracle has always been the unlimited confidence with which the creditors of foreign countries, during all these years, have given us so much capital – this although they observed with sharp eyes, as proven by the report of the reparations agent, that we handled the money without the necessary solicitude for our creditors.” 

Meanwhile, at the municipal level in Berlin, today is the first day of the newly elected municipal council, and it is greeted by a near-riot.  A crowd estimated at 200 people, mostly communists, force their way into the city hall and join the 57 communist members of the council in trying to shout down the social democrats, who hold the largest block of seat.  The 13 newly elected nazis in the chamber join in the shouting as well. 

Wiesbaden:  British forces withdraw from this town in southwestern Germany, which they have occupied since shortly after the World War, touching off celebrations by the townspeople.  The British flag was hauled down from the Hotel Hohenzollern at 2 p.m.  At the same time, a small British detachment was departing Bingen as well.  The Inter-Allied Rhineland High Commission, however, decrees that the zone evacuated by the British will be occupied by the French instead. 

To view a photo of the Royal Fusiliers marching through Wiesbaden. 

China:  

The forces of nationalist government head Chiang Kai-shek report big victories on three major fronts: Canton, Honan and Anhwei.  Rebel forces attacking Canton are said to have lost half their force and are retreating.  However, Shanghai is reported in panic at the threat of a rebel attack, and Nanking, the capital, is still threatened by rebel forces.  

Wednesday, 11 December 1929

Berlin:  

Chancellor Hermann Mueller and his cabinet prepare a package of financial reforms to present to the Reichstag tomorrow that calls for an “emergency program” of tax increases and increases in unemployment insurance contributions, as well as an emergency loan to cover the government’s spending needs.  They reportedly will ask for a vote of confidence, as indicated last week, at least partly in a bid to try to force the measures through quickly, as word is already reaching Berlin that American bankers are growing concerned about their loans to Germany. 

China:  

Communist rebel assaults on the capital, Nanking, are said to be weakening, as the nationalist government calls up the largest army it’s ever fielded to combat the rebels.  

Tuesday, 10 December 1929

China:  The country still hangs on the brink.  Communist rebel forces launch an attack on Nanking, capital of the nationalist government, where Chiang Kai-shek is making a last stand.  They’re only 40 miles out.  

Monday, 9 December 1929

Berlin:  

The cabinet of Chancellor Hermann Mueller meets all day to discuss the crisis precipitated in part by Reichsbank President Hjalmar Schacht’s broadside on Germany’s financial affairs.  They’re trying to come up with proposals that will be acceptable to the various political parties that make up Mueller’s coalition government, and keep it from breaking apart, but also address some of the cry for financial reform from Schacht.  If Mueller’s government were to fall, fears are that the Liberty Law referendum might gain momentum in the power vacuum, and the Hague reparations conference scheduled to start next month might be threatened. 

China:  

The country, and the foreigners in it, are in a state of panic.  The nationalist government is thought to be on the brink of collapse.  Canton is also reported near collapse.  Forces loyal to nationalist government leader Chiang Kai-shek outnumber the rebels 3-to-1 there, and are supported by gunboats in the harbor, but looting and mutinies among government forces continues, weakening their resolve.  Great Britain and the U.S. both have warships at hand to protect their nationals. 

Sunday, 8 December 1929

China:  With the rebellion raging in five different parts of the country, nationalist government head Chiang Kai-shek denies rumors he will resign.  Foreign observers predict Chiang will be defeated.  Several cities are reported surrounded or threatened by rebel forces. 

Saturday, 7 December 1929: Nazis Gain in Thuringia Elections

Germany:

Berlin:  Reaction to Reichsbank President Hjalmar Schacht’s broadside relative to the Young Plan (see Dec. 5) is fierce, both from inside and outside of Germany.  The federal government says that for Schacht even to make such statements risks violating Germany’s agreements following the World War.  And sources within the government are letting it be known that Schacht may not be asked to attend the second round of meetings on the Young Plan, scheduled to start in a couple of weeks in The Hague.

Outside of Germany, the French press see Schacht’s comments as political maneuvering for leadership of the nationalist movement within Germany (especially with Alfred Hugenberg in decline after his Liberty Law fiasco), as well as posturing in advance of the upcoming Hague conference at which the debt payments will be discussed. 

Schacht’s memo, though, is already producing a divide within Germany.  Bankers and big industry are tending to line up behind Schacht’s analysis, hailing the statement as just the kind of strong tonic Germany needs to solve its economic problems.  The government of Chancellor Hermann Mueller has called for a vote of confidence in the Reichstag next Wednesday.

Weimar:  Meanwhile, elections for the legislature (or “Landtag”) of the central German state of Thuringia are being held today.  By nightfall, when results are coming out, it is clear that the national socialist party (nazis) have scored another victory, though their numbers are still small.  The nazis have garnered 11% of the popular vote, which will give them 6 seats in the Landtag, making them the 3^rd-largest party.  That’s far below the 34% earned by the leading Social Democrats.  But enough that it will make forming a coalition government difficult without including the nazis. 

Vienna:  

The Federal Assembly (parliament) approves the constitutional revisions that Chancellor Johann Schober has been working on for five weeks.  The changes: reduce the autonomy of socialist-leaning Vienna within the country, but retain its status as a state; reduce Vienna’s tax contribution to the federal government but steer part of it to an adjoining state; introduce direct election of Austria’s President; broaden some of the President’s powers, for example emergency powers and to dissolve Parliament, but also restrict others in an attempt to avoid dictatorship; and call for absorption of the Social Democratic militia into the state police.  Of immediate practical importance, the changes are thought to defuse the potential for a coup by the nationalist Heimwehr paramilitary, as both nationalists and socialists got some of what they wanted.

China: 

The nationalist government capital of Nanking is cut off from communication, as rebel troops have it under siege.  Many of Chiang Kai-shek’s best generals have defected.  Communist rebel forces are also still reported to be advancing on Canton.  Both Nanking and Canton, as well as Shanghai and Hankow, are under martial law.  British gunboats are preparing to remove British nationals.  Chiang is reportedly mustering 70,000 troops for a last stand in his capital. 

Friday, 6 December 1929

Berlin:  

The cabinet of Chancellor Hermann Mueller holds a meeting to discuss the memo that Reichsbank President Hjalmar Schacht issued last night, which blasted them and foreign powers for failure to meet the necessary terms of the Young Plan. 

Libya:  

Italian forces conducting a suppression campaign against Libyan resistance fighters take the town of Brach by surprise attack, without a shot fired. 

Vienna:  

University and high school officials, at a special meeting, decide they are closing their institutions for an indefinite period of time, in an effort to get control over the violence plaguing the schools.  Socialist and nationalist students often battle each other, disrupting lectures and resulting in frequent calls to the police.  And the nationalist students also battle against Jewish students and professors.  Property damage from the fighting has been extensive. 

Warsaw:  

Communists hold demonstrations in several parts of Poland, including a group of mostly teenage boys who parade past the U.S. Embassy here, throwing rocks, breaking windows and shouting against what they call the “American intervention in the Chinese-soviet conflict.”  Police arrest 5.  

China:  

Nanking, capital of the nationalist government, is under martial law as the troop defections that started three days ago have turned into full-scale rebellion.  Canton, on the southern coast, is also under martial law, with communist rebel forces approaching, refugees pouring in, and executions and police raids rampant.  U.S. gunboats in Canton harbor are on guard.

Thursday, 5 December 1929: Reichsbank President Schacht Blasts Germany's Leadership

Berlin:  

A broadside hits the German political landscape relative to support for the Young Plan, and it comes from an unexpected source.  Reichsbank President Hjalmar Schacht surprises nearly everyone when he releases tonight a memo to Chancellor Hermann Mueller and to the public – at the same time.  The memo blasts both Germany’s political leadership, and other nations’ political leadership, for failing to do what is necessary to make the Young Plan successful. 

First, the surprise: Schacht was supposedly the chief German delegate to the Hague meetings that negotiated the Young Plan.  Yet press reports coming out in the wake of this development are pointing out that Schacht hardly participated in those meetings, showing up for only a few days, and never seeking private audiences with other government officials to whom he might have made these views known.

 

Second, the content of Schacht’s broadside:  Schacht’s memo says both the German government and foreign governments have failed to follow the procedures necessary to make the Young Plan successful.  Foreign governments, he says, have not stuck with the Young Plan as it was originally presented – they’ve changed the terms as the negotiations have gone along, thereby placing additional burdens on Germany that will make it harder for her to pay the debts.  This while the German economy has lost the prospective revenue of hundreds of millions of marks in private claims against Poland arising from the World War, which Germany agreed to abandon. 

The German government, for its part, has not taken steps to get its own financial house in order, which will be necessary if Germany is to meet the terms of the plan.  Schacht says Germany’s posture relative to the Young Plan was predicated on stimulating economic production, thereby increasing the country’s ability to pay, and settling once and for all the way revenues are shared between the federal government and the municipalities (which are accused of spending too freely).  But Schacht says nothing has been done, either to stimulate economic output or to settle the revenue-sharing arrangements.  As a result, the revisions of the Young Plan, far from reducing Germany’s debt burden, won’t even address the deficit already envisioned.  As a result, Schacht says, he cannot be held further responsible for prospects of the Young Plan within Germany.  He says Germany’s creditors won’t approve the loans to Germany that they’re contemplating, and yet they bear part of the blame for it.  

Schacht evidently discussed his views with members of the Mueller cabinet earlier in the week, but reportedly received a cool reception.  The Berlin stock market drops sharply after his memo is published. Adding to the confusion of Schacht’s memo is the way he chose to disseminate it – releasing it simultaneously to Mueller and the public.  Press observers are saying it is without precedent in German political history. 

China:  

The troop mutinies that started at Pukow are spreading, with more troops in more regions reportedly revolting to join the rebels.  Five provinces, including large parts of the Yangtse River Valley, are reporting unrest.  The rebels fire on British gunboats in the Yangstse River at Ichang.

Wednesday, 4 December 1929

Washington:  

Secretary of State Henry Stimson denounces Russia’s statement from yesterday that the United States’ urging Russia to settle the Manchuria dispute was “unfriendly.”  Stimson says rather the U.S. action was prompted by the seriousness with which the United States views the Kellogg-Briand Pact.  Stimson reiterates a belief that public opinion can be used as a tool for enforcing peace, and for encouraging compliance with the Kellogg-Briand Pact by the nations who signed it. 

Moscow:  

Yet Russia keeps up the war of words.  Maxim Litninoff, Acting Commissar of Foreign Affairs, advises “protectors of the Kellogg pact” to keep their attentions focused on their own parts of the world.  “The Soviet Union, unlike other countries, rejected extraterritorial rights and privileges in China, and it would seem strange why, under this circumstance, the Nanking and Mukden governments took the path of violence with provocations toward soviet Russia.  This is explained by the simple fact that the start and further encouragement of actions of the Nanking government originated from the imperialistic camp.” 

Elsewhere: 

Shanghai:  Meanwhile the national government of China also issues a reply to the communiqué it, like Russia, received from the United States and other world powers, urging it to settle the Manchuria conflict peacefully.  The reply promises that, “apart from measures of self-protection and defense of territorial sovereignty against external invasions, China would observe her obligations under the pact.”

China:  The troop rebellions in the civil war grow more serious.  Reports say the number of mutinous troops in Pukow is 15,000, and they’ve headed north after looting the city.  Meanwhile, communist rebels have reportedly killed 100 people and looted the city of Kanchow (Ganzhou), in southern China.

Berlin:  The fallout from Alfred Hugenberg’s Liberty Law initiative continues: 8 more German Nationalist People’s Party delegates in the Reichstag resign, including the party chairman, joining the six who resigned yesterday in protest of Hugenberg’s leadership.  Ten more are expected to follow soon.  

Tuesday, 3 December 1929

Berlin:  

The political fallout begins for nationalist political leader Alfred Hugenberg over his failed Liberty Law* initiative.  Six Reichstag delegates from his German National People’s Party resign from the party in protest over Hugenberg’s leadership, which has been driving the party increasingly nationalist.  This follows the split already evident last week, when some of his own party’s members voted against his proposed Liberty Law.  But Hugenberg is also being excoriated from the even more radically nationalist Adolf Hitler, leader of the national socialists.  

Russia: 

Nikolsk-Ussurlisky: Russian and Manchurian officials sign an agreement formally ending fighting in the Russian invasion of Manchuria.  According to dispatches, joint control of the Chinese Eastern Railway will be reinstated.  It’s still not clear what role the national government of China has in this agreement, if any, nor what recognition it will give the agreement, if any . . . nor that it even matters, given the central government’s tenuous-at-best rule in Manchuria. 

Moscow:  Meanwhile, the soviet government informs the French government (which is acting as the mediator between the United States and Soviet Union, since the two countries have no diplomatic relations) that it considers “unfriendly” the recent U.S. advice that Russia keep in mind the Kellogg-Briand Pact which it signed, and settle the Manchuria dispute peacefully.

 

“The Union of Soviet Socialist Republics, from the first day of its existence, has pursued a policy of peace, and unlike other powers has never resorted to military action except as a necessary step for defense, due to direct attack on the union or armed intervention in its internal affairs.  The Soviet Union has consistently pursued this policy and intends to pursue it independently of the Paris pact for abolition of war.”  The response goes on to outline Russia’s case that it was China’s policy over the Chinese Eastern Railway that started the conflict.    

“The climax of this policy was the seizure of the Chinese Eastern Railway without any warning or preliminary presentation of any claims, in violation of existing agreements regarding the joint administration of the railway.  The soviet government believes that if action such as that of the Nanking government were taken toward the United States, Great Britain or France, it would be considered by their governments sufficient cause for putting into force reservations they made when signing the pact.  [. . .]  The Nanking government not only resorted to illegal seizure of the Chinese Eastern Railway, but mobilized along the soviet Manchurian railway an army, various sections of which, together with counter revolutionary Russian bands included therein, made systematic attacks on the U.S.S.R., crossing the frontier and firing on units of the Red Army and frontier villages, robbing and violating a peaceful population, causing thereby losses of lives and property.  Despite frequent warnings through the German government, these attacks did not cease but rather increased and compelled the soviet far-eastern army, in the interests of defense, protection of the frontier and the peaceful population, to take counter measures.  Thus the actions of the Red Army had due considerations of self-defense and were in no wise violations of any obligations of the Paris pact.

“That cannot be said of armed forces in Chinese territory and Chinese ports of those powers who have applied Tuesday to the Soviet Union with identical declarations.  The soviet government states that the government of the United States has addressed its declaration at a moment when the soviet and Mukden governments already had agreed to several conditions and were proceeding with direct negotiations which would make possible prompt settlement of the conflict between the Soviet Union and China.  In view of this fact, the above declaration cannot but be considered unjustifiable pressure on the negotiations, and cannot therefore be taken as a friendly act.  In conclusion, the soviet government cannot forbear expressing amazement that the government of the United States, which by its own will has no official relations with the soviet, deems it possible to apply to it with advice and counsel.” 

China:  

New fighting erupts in the civil war.  Communist rebels are reportedly advancing on Canton, on the southern coast, and two divisions of nationalist government troops mutiny at Pukow, across the river from the capital of Nanking, after refusing orders to deploy to Canton. 

Monday, 2 December 1929

Washington:  

The United States issues an appeal to 53 nations that signed the Kellogg-Briand pact, which prohibited war as means of national policy, to join in pressuring Russia and China to solve their Manchuria dispute through peaceful means.  Separately, the U.S. notifies Russia and China that the respect with which they are held by the rest of the world will depend on peaceful resolution.  Since the U.S. has no diplomatic relations with Soviet Russia, that message is delivered via the French government.  Great Britain issues a memorandum the same day saying it is prepared to join in the effort to bring about a peaceful settlement to the Manchurian dispute.  Japan issues a statement saying it does not intend to support the U.S. initiative.

Germany:  

Berlin: The Federation of German Industries, a large and influential trade group, releases a statement calling for sweeping economic, financial and socio-political reforms if Germany is to avoid economic collapse.  The group says high taxes, excessive government handouts and federal government aid to German states, are financially unsound and will lead to ruin if not stopped.

Darmstadt: 250 members of the nationalist Stahlhelm paramilitary group are arrested after clashing with civilians.  

Sunday, 1 December 1929

Rome:  

Pope Pius XI, in a speech to a gathering of Rome’s parish priests, criticizes Italy’s fascist government and press, saying Catholic newspapers in Italy are finding it more difficult to discuss church issues freely.  Conversely, he says Italy’s fascist press is discussing matters related to the church with “indiscretion.” 

Moscow:  

The communist government jails Princess Sophie Lieven, sister-in-law of Sir Kynaston Studd, former Lord Mayor of London, for teaching Bible lessons to the children of workers’ families.  Ms. Lieven is also daughter of the former Grand Master of Ceremonies of the Russian Imperial Court.  She is being held in the Lublanka jail in Moscow.  

Saturday, 30 November 1929

Berlin:  

As expected, the Reichstag rejects the Liberty Law*.  Nevertheless, German law requires that the measure also be submitted to a public referendum, which will be held December 22.  The Liberty Law didn’t even get the votes of all the members of the political parties that supported it.  The vote was actually conducted in sections, based on the provisions of the measure itself, but none of the votes was close, with the proposal failing by margins such as 318-82 and 312-80 (with some abstentions). 

Coblenz, Germany:  

Ten years after occupying it under the terms ending the World War, French forces complete their pullout from Coblenz, to great celebrations by the townspeople.  At the same time, in Aachen, Belgian troops that had been occupying that place since the World War evacuate.  

Friday, 29 November 1929

Berlin:  

Foreign Minister Julius Curtius takes the Reichstag floor to assail the Liberty Law* measure, saying the Young Plan (which the Liberty Law would refute) is Germany’s best hope of paying off war debt.  Curtius accuses the measure’s main supporter, nationalist politician Alfred Hugenberg, of “calculated tricks” in his attempts to get the German public to support the Liberty Law.  The Young Plan “is to bring an important amelioration of the burdens on Germany,” Curtius says.  Under German law, the Reichstag has no choice but to take up the Liberty Law measure, because 10% of German voters signed petitions asking for it (see November 2). 

“It is nonsense to determine by a plebiscite that a people doesn’t want to pay,” Curtius says.  “Of course it doesn’t want to pay.  The only question is whether it must pay or not.  A plebiscite on this question is sheer nonsense.  In comparison with the Dawes Plan, the Young Plan on a new political basis is to bring an important amelioration of the burdens on Germany.  German economy and the German people will be benefited by it.”

Nanking:  

The government of China finally agrees to peace terms with the Soviet Union (though practically speaking, it’s not clear it even matters anymore – Manchuria has unilaterally taken the lead).  Russian military actions in Manchuria are limited now to only a few air raids by bombers on selected sites in western Manchuria.  Russian troop withdrawals continue.  The United States and the other world powers, that were said to be contemplating some form of joint action against Russia, are now said to no longer see the need.

Thursday, 28 November 1929

Washington:  

The United States government is reportedly proposing some kind of joint action by world powers in the face of Russia’s invasion of Manchuria.  News reports from Tokyo say Japan has been contacted by the U.S., and other reports say Great Britain, Italy and France have been contacted as well.  British Foreign Secretary Arthur Henderson, speaking before the House of Commons, says Great Britain is prepared to participate in some form of joint action, but the nature of what that might be is unclear. 

Manchuria:  

However, Russia is beginning to withdraw its forces from Manchuria, having achieved its military objectives, although Russian warplanes are still conducting flyovers.  But there are conflicting reports about who has negotiated what with the Soviets.  Manchuria’s warlord ruler, Zhang Xueliang, is said to have negotiated peace unilaterally with Russia, allowing Russian workers and soldiers on the Chinese Eastern Railway to return.  But China’s government is reportedly seeking peace talks with Russia too.  Either way, Japanese reports out of Manchuria say the danger appears to be over.

Wednesday, 27 November 1929

Berlin:  More bad economic news: a report says unemployment in Germany has climbed over 1 million.

Tuesday, 26 November 1929: Soviet Union Claims Victory in Manchuria

Manchuria:  

China asks for the world’s help with the Russian invasion of Manchuria.  The government appeals both to the League of Nations and all the countries that signed the Kellogg-Briand Pact to come to China’s aid and punish the Soviet Union.  “Take appropriate steps to stop and punish this deliberate violation,” the statement says.  Chinese troops in Manchuria, still fleeing in disarray, are reported roaming through the countryside seeking food and water.  However, new reports say Hailar is not in fact occupied by Russian forces.

Meanwhile, Russia is already claiming victory in Manchuria.  Russia says fighting has stopped, with 12,000 Manchurian casualties to 280 Russian soldiers killed.  And Manchuria’s warlord Zhang Xueliang reportedly has opened his own negotiations with the Russians and is said to be agreeing to resume the status quo: allowing Russia to control the Chinese Eastern Railway.*  Press reports from Moscow say the Soviet Council of Defense has decided to reject any attempts by other nations to intervene on China’s behalf. 

Soviet soldiers with captured Kuomintang banners

(Note that dates and other information in Wikipedia article appear to be wrong.)

Monday, 25 November 1929: Hailar, Manchuria in flames under Soviet bombing

Manchuria:  

The town of Hailar is reported in flames under Russian bombing, with thousands of refugees streaming southward.  Some reports say the Russians forces, backed by tanks and artillery, have already occupied the city, with Chinese casualties as high as 12,000.  Russia claims 8,000 Chinese soldiers captured.  Soviet troops are in control of Misham, Muling, and Russian cavalry have appeared south of Ninguta.  Chinese resistance, such as it was, is melting fast.  Chinese forces are reportedly trying to establish a headquarters at Buchatu, 100 miles east of Hailar, but fleeing troops are pouring in at such a rate, and in such a state of panic, that it is questionable whether they will be able to organize.  The Chinese Eastern Railway is bringing in every available train and car to transport refugees away from battle fronts.  But there are too many, and civilians are camping by the tracks. 

China:  Meanwhile, the nationalist government’s forces, even with the Russian invasion of Manchuria, are still fighting the civil war, and report a decisive victory over rebels in Honan and Hupeh, in central China, with 40,000 rebel casualties to 8,000 for the government.