The role of the financier
Finance, we are told, is the sinew of modern industry, the base upon which commercial operations rest, and the controller, in high finance, is one of the worshipful company of captains of industry. Now and again there is a storm in financial circles, one of its star performers comes to ruin, the veil is torn aside, and we get a glimpse of the nature of financial operations.
Such an instance has occurred lately with the ruin and suicide of the financier, James White. A fellow financier, Sir Edward Mackay Edgar, made a statement to the Daily News (2/7/27) from which we extract the following :—
“Thousands of people will be ruined as the result of the wild speculations of the late Mr. James White. Already two of his closest friends have gone ‘broke,’ and God alone knows what will happen within the next fortnight. It will be the sensation of the 20th century in the matter of finance.
“The British Controlled Oilfields is my baby. I organised it and got it into a fine position. It was the aim of Jimmy White to obtain as many shares as possible and force up the price. Then he hoped to sell and realise a fortune. That was as far back as three years ago. I would not consent because of the advice of technical experts on the spot.
“On the Thursday before Good Friday, Mr. White came to me and asked me to join a pool to force up the price of B.C.O. shares. For five hours I was on my hands and knees in my flat imploring him not to engage in such a mad venture, knowing that disaster could be the only result. He left me that night, and I have only seen him once since.
“He entered upon a bitter campaign to reduce me to financial ruin. He failed in his efforts. He bought shares right and left. He relied upon by group of friends selling short. We never unloaded a single share, but kept them, and we knew that White on June 30th would have to meet his enormous commitments or go ‘broke.’ This last effort of his was a gambler’s last throw of the dice. I knew the crash was coming. All my friends were aware of it.”
The interesting side to us in the above statements is the fact that the foundations of modern industry are so frail that men like White can play ducks and drakes with it and bring chaos where order should reign, by indulging in lawful financial operations. Instances such as this bring to the front the question, “What is the object of industry?” Is it to provide people of a peculiar nature with an outlet for a glorious gamble, or is it to provide society with means to meet the mental and physical needs of the people composing society. Evidently our “great”captains of industry hold the view that the earth and the fulness thereof was made for their sport and enjoyment—and we are merely items too cheap to be worthy of consideration.
(Socialist Standard, November 1927)