Potential Ramifications Today.After World War I and the collapse of the Imperial Russian Government, and the subsequent revocation of Tsarist debt by the Soviet Government, the Property Office (L'Office des biens et intérêts privés) established by the French Government received 1,600,000 individual declarations from owners of now worthless Russian securities. Some 25% of France's total foreign investment was in Russian bonds. The ownership of Russian securities was, with the exception of the French "rentes" (French government securities), the most widely owned by people of small savings - clerks, shopkeepers, industrial workers. Many French families lost money by investing in Russian securities. Some lost their entire savings. Today, if any particular French family has not personally suffered from its investment in Russian securities, they will know of a family that has. We have established, and it is an accepted fact, that the motivation for the French marketing of the 1909 Russian securities was primarily political. But it is not commonly known that the promotion of these securities by the underwriting banks was motivated by one over-riding concern: it was the financiers who held $160 million in 1904 Russian Bonds that were to mature in May, 1909. The long-term fifty (50) year 1909 bond was designed primarily to refinance the 1904 loan. Simply stated, the banks and financiers needed to get their money out, particularly after the real evidence, in 1905, of significant social turmoil in Russia demonstrated the Tsarist government's tenuous hold on power. And, of course, there were the commissions to be made. Simply understated, a proponent of this position would state that the advice given by the banks to the French investor was not unbiased, and was not sound. A discussion of the Russian loans opens old wounds and dredges up skeletons from the closets of the underwriting banks, all of whom are active and prospering today. Should the actual recovery of a $3,000,000 American Gold Eagle cargo from the REPUBLIC occur (and without the materialization of source documentation), it would confirm the motivation for the concealment of the loss. The participants in the transaction would then be presumed to have had knowledge of the loss; they then become possible conspirators in the concealment. This loss would have had a significant effect on the perceived safety of the French investor's purchase of the 1909 Russian bond, and this information would be proved as having been withheld from the French investor by someone within the underwriting banks, the financiers and/or French government; someone had knowledge about the unstated perils of Russian bond investment. There is, of course, the possibility that the French banks themselves did not know of the loss. Given the typical security measures of gold transactions, particularly the segmentation of information (where information is made available to those only on a "need-to-know-basis," see: Security Measures [1]), if title to the gold passed to, and the gold was accepted by, the Russian Government on January 22, 1909, at New York - once title had passed, only the Russian Government would be responsible for the shipping and delivery arrangements. The concealment of the loss would have required the agreement of only the governments (suppression of any formal inquiry) and certain select employees of White Star Line. However, it can be argued that the justification for the concealment of the loss of Republic's gold cargo was concern for the very survival of the Russian government, that both the French and British governments acted in what they had believed at the time to be their citizens' best interests: the Imperial Russian Government's survival had to be assured in order to permit at least the possibility that Russia could, some would have said likelihood that Russia would, repay its significant, pre-existing and outstanding debt to predominately French and British citizen investors. |
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