Shannon nodded. This was the arrangement he hoped to establish, in order to have Semmler buy the boat behind the cover of an uncheckable company.

“A holding company,” said Mr. Stein, “as its name implies, may not trade in any form. It may only hold stock in other companies. Does your group of associates hold shares in other companies which it would like to have taken over and held in Luxembourg?”

“No, not yet,” said Shannon. “We hope to acquire existing companies in the area of chosen operations, or found other limited-liability companies and transfer the majority shareholdings to Luxembourg for safekeeping.”

By the end of an hour the agreement had been reached. Shannon had shown Mr. Stein his £4000 banker’s check to prove his solvency, and had paid a deposit of £ 500 in cash.

Mr. Stein had agreed to proceed at once with the foundation and registration of a holding company to be called Tyrone Holdings SA, after searching through the bulky lists of already registered companies to ensure that no such name existed on the register. The total share capital would be £40,000 of which only £ 1000 would be issued immediately, and this would be issued in 1000 bearer shares of £ 1 each. Mr. Stein would accept one share and the chairmanship of the board. One share each would go to his partner, Mr. Lang, and a junior partner in the firm. These three men would form the board. Three other staff members of the firm—they turned out later to be secretaries—would be issued with one bearer share each, and the remaining 994 shares would be held by Mr. Brown, who would thus control the company and whose wishes the board would have to implement.

A general meeting to float the company was fixed for twelve days thence, or any time after that, if Mr. Brown would let them know in writing when he could be in Luxembourg to attend it. On that note Shannon left.

Before closing time he was back at the bank, returned the check, and had the £4000 transferred to the account at Brugge. He checked into the Excelsior and spent the night in Luxembourg. He already had his reservation for Hamburg the next morning, and he had the hotel call to confirm it. It was to Hamburg that he flew the following morning. This time, he was looking for arms.

The trade in lethal weapons is the world’s most lucrative, after narcotics, and, not surprisingly, the governments of the world are deeply involved in it. Since 1945 it has become almost a point of national prestige to have one’s own native arms industry, and these industries have flourished and multiplied to the point where by the early 1970s it was estimated there existed one military firearm for every man, woman, and child on the face of the planet. Arms manufacture simply cannot be kept down to arms consumption except in case of war, and the logical response has to be either to export the surplus or encourage war, or both. As few governments want to be involved in a war themselves but also do not wish to run down their arms industries just in case, the accent has for years been on the exporting of arms. To this end, all the major powers operate highly paid teams of salesmen to trot the globe persuading any potentate with whom they can secure an interview that he does not have enough weapons, or that what he does possess are not modern enough and should be replaced.

It is of no concern to the sellers that 95 per cent of all the hardware on the face of, for example, Africa is used not to protect the owner-country from external aggression but to keep the populace in subjection to the dictator. Arms sales having logically started as a product of the profits rivalry between competing Western nations, the entry of Russia and China into the arms-manufacturing and -exporting business has equally logically transferred the salesmanship into an extension of the power rivalry.

The interaction of profit desirability and political desirability has produced a tangled web of calculations that continue daily in the capitals of the major world powers. One power will sell arms to republic A, but not to B. At which a rival power will rush to sell weapons to B but not to A. This is called establishing a power balance and therefore keeping the peace. The profit desirability of selling arms is permanent; it is always profitable. The only constraints are imposed by the political desirability of this or that country having certain arms in its possession at all, and from this shifting quicksand of expediency versus profit has evolved the intimate link between Foreign Affairs Departments and Defense Departments all over the world.

To establish an indigenous arms industry is not difficult, providing it is kept basic. It is relatively simple to manufacture rifles and submachine guns and ammunition for both, along with hand grenades and hand guns. The required level of technology is not high industrial development, and the variety of needed raw materials is not large. But the smaller countries usually buy their weaponry ready-made from the larger ones, because their internal requirements are too small to justify the necessary industrialization, and they know their technical level would not put them into the export market with a chance.

Nevertheless, a very large and growing number of medium-sized countries have in the past two decades gone ahead and established their own native, if basic, arms factories. The difficulties increase, and therefore the number of participating nations decreases, with the complexity of the weapon to be made. It is easy to make small arms, harder to make artillery, armored cars and tanks, very difficult to create an entire shipbuilding industry to build modern warships, and hardest of all to turn out modern jet fighters and bombers. The level of development of a local arms industry can be judged by the point at which local weaponry reaches its technical limits, and imports have to be made for anything above those limits.

The main world arms-makers and -exporters are the United States, Canada, Britain, France, Italy, West Germany (with certain banned manufactures under the 1954 Paris treaty), Sweden, Switzerland, Spain, Belgium, Israel, and South Africa in the Western world. Sweden and Switzerland are neutral but still make and export very fine weaponry, while Israel and South Africa built up their arms industries in light of their peculiar situations, because they did not wish to be dependent on anyone in the event of a crisis, and both export very little indeed. The others are all NATO countries and linked by a common defense policy. They also share an ill-defined degree of cooperation on foreign policy as it relates to arms sales, and an application for an arms purchase made to any of them habitually undergoes a close scrutiny before it is granted and the arms are sold. In the same vein, the small buyer country always has to sign a written undertaking not to pass weaponry sold to itself to another party without express written permission from the supplier. In other words, a lot of questions are asked, before a sale is agreed to, by the Foreign Affairs Office rather than the Weapons Sales Office, and sales are almost inevitably deals made government-to-government.

Communist arms are largely standardized and come mainly from Russia and Czechoslovakia. The newcomer, China, now also produces weaponry up to a sufficiently high level of sophistication for Mao’s guerrilla-war theory’s requirements. For Communists the sales policy is different. Political influence, not money, is the overriding factor, and many Soviet arms shipments are made as gifts to curry favor, not as commercial deals. Being committed to the adage that power grows out of the barrel of a gun, and obsessed with power, the Communist nations will not merely sell weapons to other sovereign governments, but also to “liberation” organizations that they politically favor. In most cases these are not sales, but gifts. Thus a Communist, Marxist, extreme Left-wing, or revolutionary movement almost anywhere in the world can be reasonably assured of not running short of the necessary hardware for guerrilla war.