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From International Press Correspondence, Vol. 3 No. 15, 13 February 1923, pp. 119–120.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
The United States did not participate in the proceedings of the Paris Entente conference. But the hundredfold rumors in the German newspapers, that the United States would interfere in the course of the reparation negotiations, that they would protest against France’s proceedings, that they would grant Germany an extensive loan, all this has not been substantiated by any actual fact It may be that official steps have been taken, but up to now there has been no actual interference on the part of the United States. But this by no means signifies that the United States take no interest in the problem, it only signifies that they do not consider the right moment for interference to have arrived.
If we examine Germany’s position, and the part it plays in imperialist politics, we can draw the following conclusions:
In consequence of the war, and of the severe peace conditions, Germany has fallen into such an economic condition that she cannot continue to exist as an independent power. The debasement of Germany from an independent state to a colony is being worked out, not only by the control of German finances provided by both the English and French plans but by the fact that German capital is passing more and more into foreign hands from month to month.
The question now is: If Germany cannot remain an independent power – in what imperial state is she to be incorporated?
Apart from distant Japan, there are three imperialist systems whose rulers could make the attempt of bringing Germany within their range of power.
1. France has the advantage of immediate neighbourhood, of the economic necessity of combining German coal with French iron ore; she possesses the necessary military forces, and the necessary allies: Belgium, Poland, and the countries of the Little Entente, enabling her to keep Germany in subjection. Since the victory of Fascism, Italy also inclines more to the French imperialist system than to the English. Germany’s reparation obligations give France a legal hold over Germany, a pretext for colonizing her by force.
But imperialist France feels herself too weak to draw the whole of Germany within her sphere of power. The population of France stagnates; within a few decades the population of Germany within her present boundaries will be double that of France, and as the numerical and economic forces of France scarcely suffice to maintain even the existing French imperialist system, France cannot venture io colonize Germany as a whole. As may be seen from the eternal repetition of the demand for productive pledges, French policy aims at separating from Germany, those areas most important for France’s economy, the district on the left bank of the Rhine and the Ruhr valley, thus creating the necessary coal basis for the French heavy industry, and at ruling the rest of Germany politically and further partitioning her if possible. The separation of the Upper Silesian industrial area, and the allotment of this to Poland, Was already one stage on the road to the diminution of Germany and the destruction of her economic foundations.
2. The United States. In the course of the past year the bourgeoisie of the United States has often proclaimed its willingness to play the role of saviour to Germany. The first assumption for the granting of this aid would be that France agree to a reduction of the reparation payments, and in particular abstain from applying force for the purpose of preventing Germany from gaining economic strength in the future. In this case the bourgeoisie of the United States would be prepared to put large sums at Germany’s disposal in the form of loans, to help Germany out of the reparations dilemma.
The import of this procedure on America’s part would be: To incorporate Germany into the imperialist system of America; for there can be no doubt that America’s financial terms for placing Germany on a sound basis would not be any easier than the reparation payments and control measures proposed by England. The United States certainly possess sufficient economic power to transform the whole of Germany into their colony. Not only do they possess the required capital, but they are the sole country in the world who can venture on such a step. Germany is a country whose dense population can only be maintained by industrial work. The United States is the only country in the world suffering from a lack of industrial workers even under normal conditions of the market. It is the sole country able to feed the German industrial proletariat, and c n do this, not by having raw materials transformed into finished articles in America itself by the aid of foreign immigrants, but by having the work done in Germany itself by German workers earning about one fifth – expressed in dollars – of the wages earned by the American workmen.
It is erroneous to suppose that the bourgeoisie of the United States, when deliberating on the reparation question, or possibly interfering, is moved by any sympathy for Germany, or by any anxiety for the future of European civilization or similar ideas. The sole question is, how to get the capable workers of Germany to work for the United States at the lowest possible price, and how best to obtain a firm political footing in Europe.
3. England. It would be just as difficult to incorporate Germany into the British imperialist system as into the French. England has not enough capital to reconstruct the whole of Germany’s economics. And what is still more important: England is herself an industrial country, and is faced, and will a long time to come be faced, with very great difficulties in selling her own products in the world’s markets, and obtaining bread for her masses of industrial workers. But the reconstruction of Germany involves increased industrial production, and increased export of German goods abroad. For Germany can only pay interest on foreign capital invested in Germany by exporting industrial products, or by carrying on an active shipping business.
For England the colonization of Germany would thus merely signify an increase of the difficulties under which England is already laboring at the present time with her 1½ millions of unemployed. As England is thus unable to colonize by herself, she has the choice of helping either France or America to do so. The English proposals in the reparations question clearly show that they have been drawn up with the intention of giving the United States the possibility, and of making the way as easy as possible for Germany to solve the reparations question by large loans, to crowd France out of Germany, and to convert Germany into a part of the American imperialist system. The antagonism of interests between England and France is so strong that it completely pushes into the background the Anglo-American antagonisms. It may be confidently asserted that the continental-French-imperialist system is being confronted by a more and more united Anglo-American, Anglo-Saxon world market system.
Recent events prove that France feels herself strong enough at the present moment, to defy the Anglo-Saxon opponent. She knows very well the weaknesses of the English imperial world system in the East; she knows very well that modern war technics would deprive England to a great extent of the advantages of her insular position in the event of a war between France and England. We are thus of the opinion that an armed conflict is not likely between the two systems on the reparations question – at least not within the immediate future. England and America appear to be lying in wait until the increasingly hopeless condition of French finances, and the acute depreciation of the franc – this latter probably rendered more acute by English and American franc purchases – convince France that she is not able to subjugate Germany without outside help.
In our reports we have frequently emphasized that the fate of European capitalism is greatly dependent on the question whether the united States will decide in favor of a pro-European or an anti-European policy. Expressed in other words: whether the United States will try to find the markets required for the extension of its flourishing economic life, and especially for its extensive capital export, in the non-European parts of the world, above all in South America, in Asia, and in the English settlement colonics, or if they will prefer to attempt to support and save European capitalism by active interference.
The differences of opinion in the United States have not disappeared during the past quarter of a year. Although much has been said and written on interference in Europe, nothing has actually been done. On the contrary, the acceptance and coming into force of the high protective tariff shows that at the moment the anti-European tendency of American politics is stronger than the pro-European. The favorable state of the American market has doubtless strengthened the anti-European tendency during the last few months, for the American capitalists take this as a proof that American economics can flourish in spite of the ruin of Europe. This opinion is clearly voiced in the November report of the National City Bank, which states:
“Up to now facts appear to support the opinion that Europe will be obliged to buy from us at least as much foodstuff as before the war, and the revival of business during the past year, in spite of the great strike, further supports the opinion that this country can attain a high degree of prosperity even if Europe can End no way out of the confusion.”
Despite this, the conflict of opinion upon this question is by no means at an end. All American economic journals continue to occupy themselves in detail with the European question. The American Academy of Political and Social Science, has for instance devoted 2 numbers of its annals this year to the European question.
The question being one of great importance, we shall repeat the main data of its development.
As a general rule it is assumed that the foreign trade of the United States does not exceed 10 per cent of the total trade. If would thus appear that foreign trade is of no great general importance for the United States. But there are a number of branches of production which export a much greater percentage of their product. For instance, before the war 67 per cent of the cotton was exported.
It must further be emphasized that the constant running expenses of a plant form a great part of its total outlay, and that these are for the most part independent of the amount of the output, so that even a small reduction in production, resultant on lack of selling markets, may suffice to render an undertaking unprofitable. [1] The president of the American Steel Trust, J.A. Farrel, when making an application to the foreign trade office 1 or 2 years ago, wrote to the following effect:
“In every business there is a certain part of the production, roughly estimated at 20 per cent, which cannot remain unsold if the first 80 per cent of sales are to be profitable. .If the last 20 per cent are left out, the whole transaction ceases to yield a profit.”
From this viewpoint the export trade of America is of much greater importance than the average six figure of 10 per cent might lead one to suppose. And it is from this viewpoint that the situation in Europe is regarded.
When judging the European situation, an important point for America is the difference in prices caused by the depreciation of monetary standards. The Federal Reserve Bulletin, for November 1922, reduces the prices of various European countries to dollars. The prices for 1913 being taken at 100, the wholesale price index for the most important states, at the end of October 1922, shows the following development:
|
in the United States |
165; |
Great Britain |
148; |
France |
112; |
Italy |
130; |
Germany |
79. |
This means that the United States, reckoning in dollars, could buy all goods in Germany at half the price paid in the United States. And although the higher freight rates, the export import duties, would have to be added, still it appears probable that the increase of imports into America from Europe in caused in part by these price conditions.
The European question is, now as ever, of the greatest importance to the farmer. It is true that the new tariff protects the farmers of the United States against agricultural products from Canada and Argentina. The price of agricultural products in the United States is thus regulated by the possibilities of finding markets in Europe. The American farmer is thus extremely anxious that Europe remain capable of buying his products. For although the amount of wheat and cotton consumed in the United States themselves has increased with the increased industrialization of the country, and the time may come when the export of wheat and cotton from the United States, will entirely cease, the farmers are still dependent on export to Europe for the sale of a great part of their other products. And despite the increase in the prices of food which took place in 1921, the farmers are still in a very difficult position, as we shall see in our next section.
1. This, in our opinion, is one of chief causes why Germany is actually becoming impoverished at the present time, in spite of the full employment of all existing labor.
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