Abstract: The paper deals with one of the largest covered-up financial affairs in Serbia between the two world wars, that was carried out with participation and knowledge of the very top of the political establishment at that time. The aim of the article is to contribute to the previous efforts to empirically prove how large-scale corruption worked, that is, how the plutocratization had shaped the political elites in the Kingdom of Yugoslavia. Through an analysis of the establishment and operation of banks and companies that were grouped into a large consortium called the Dragiša Matejić concern, the paper explains the mechanisms of hitherto uninvestigated financial malfeasance, cover-ups, and deliberate violations of the law by the highest state officials, as well as to what extent the principle of nepotism and cronyism prevailed in the business world.

Keywords: plutocracy, financial affair, corruption, National Bank of KY, Vojislav Marinković, Aleksandar I Karađorđević

Summary

Generally speaking, the topic of this paper is war profiteering and its subsequent legitimization through certain economic and political forms of corruption. However, thanks to rich archival material, for the first time we are able to follow all stages of the plutocratization of part of the Serbian political elite through the establishment and operation of a banking–industrial concern, created on the millions of profit that certain Serbian politicians and entrepreneurs had made in the so-called gray zone, at the time of the declaration of an armistice during the First World War. These were persons very close to King Aleksandar Karađorđević, some of whom were introduced to the public as the king’s business associates, and others as his close friends. The documents unequivocally indicate that the laws and regulations of the state did not apply to this group of businessmen and politicians, led by one of the heads of the Democratic Party, Vojislav Marinković. The space for business combinatorics was almost unlimited, as evidenced by the fact that this group was powerful enough to bring its representative to the position of governor of the National Bank of the Kingdom of Yugoslavia, which was a lending center between the two world wars. Nevertheless, the inadequate professional management of the consortium and the millions of loans spent for the unintended purposes caused the dissatisfaction of that part of the Court politicians and entrepreneurs, mostly those with much less privileges. It turned out that from the behind-the-scenes conflict between the two financial and political fractions, Serbian society altogether suffered the most damage in the end.