The producers news., 1927-06-03

little owners, loan Ih1s amaSsed capital 10 10 VIC
capitalist enterprises (and also governments) for
their establishment and expansion
Industry, in the period of domination OF the
big corporate enterprises, and also the capitalist
svndicates and trusts, needs tremendous masses
of capital for its existence and development, which
considerably exceed the capital of the different ,
industrial capitalists The latter for this reason,
are constrained more and more to turn to the
banks for capital One the other hand, the banks,
which have the administration of tremendous sum
of money and masses of capital are interested IN !
the most secure and advantageous investment of
this capital, and they prefer to assign it to the
biggest capitalist enterprises and alliances (and
also as loans to the bourgeois governments). AS
result, capitalism Develops the role of the
banks and the dependence of industry upon the
banks grow also.
Originally, when there was little free capital and
the banks had at their disposal comparatively IN
significant sums, they lent them in large quanti
ties at high rates of interest, to trade and as
mortgages on various kinds of real property Gland,
houses, etc..
Further, with the growth of the amount of
money and free capital, the banks in order to
assure their depositors high and secure rates of
interest, began more and more to invest their
capital in industrial enterprises and furthermore
in the biggest ones promising tremendous profits.
Thus the banks also under compulsion to
fasten the growing portion of their capital upon
industry, and in particular upon the corporate en-
terprises cartes, syndicates and trusts
AS result, continually increasing linking-up
and uniting of banking capital with industrial took
place, on the basis of the tremendous accumula-
tions of capital in the banks on the hand, and
on the other result of the enormous proper
tions of the capital necessary for the establish
ment and operation of the colossal capitalist en-
terprises. In this way industry falls into continu-
ally increasing dependence upon the banks, and
the latter become more and more involved in the
closest connection with industry and in the con-
troll over capitalist enterprises and the direction
of them. Thus all the conditions are prepared for
the birth and growth of that form of capital
which is called finance capital.
Is. HOW is THE CLOSE CONNECTION BE-
TWEEN THE BANKS AND INDUSTRY
REALIZED?
The banks, investing great masses of capital In
the biggest capitalist enterprises, particularly in
the big corporations, carels, syndicates, and
trusts become interested in the security and pro-
motion of these enterprises. In order to secure
their influence and control, the banks send into
the management of the capitalist enterprises theil
own representatives who later become directors
and members of the highest supervisory councils
of these enterprises. The banks then acquire more
and more stock of these industrial enterprises anC
in this way generally become the real owners anC
managers Of the big industrial enterprises.
Besides this the further the latter develop, thu
more they take the form of corporations, i. e.
: their capital consists of shares of stock, and tn
issuance and distribution Of these generally take
place thru the banks. The banks thus not Onl,
lend capital to the industrial enterprises but ais
n take an immediate part in their establishment
providing for the formation of their capital b
i distributing their stock
Thus we have the most profound penetration 0
e banking capital into industry. This does nc
mean, however that the industrial capitalists tn
d biggest of them, the so-caled magnates or king
u of industry the chief owners and directors of tn
L. corporations, syndcates, and trusts, fall into dt
e pendence upon the banking princes and magnate
'e What finally does take place is a complete fuso
y or grating together of the banks and industr,
ID and one and the same group command in bot
fields.
s. In the management of the banks on the or
e. hand, and in the syndicates, trusts, and big Co
porations on the other hand, we find more al
I more one and the same group of the biggest ca
Of italists each of whom is at the same tin
t. owner and director in a number of banking al
r. industrial enterprises.
9U Thus not only does the grating together
m banking and industrial capital take place, but all
NJ the gathering of the commanding positions in bo
ld fields into the hands of vanishngly small gror
is of the biggest bankers and magnates of industl
lg who hold everything in their hands and manas
everything; and the further this process goes Il
on richer do they become, piling up incalculab
IL wealth. And the government carries out in full t
Oh will of these bankers and magnates of industry.
en- This is the picture presented by finance capit
nd 16. WHAT CHANGES DOES BANKING CAP
~ TAI UNDERGO AS A RESULT OF TH
ne DEVELOPMENT OF CAPITALIST CA
IS Tells, SYNDICATES, AND TRUSTS?
ne The banks, according as they link themselves
M more and more with industry, and penetrate in
all the big corporations, cartels, syndcates, a
trusts, commence in their turn to come closer t
gether and to unite with one another The ia
ne is that In order to operate and supply the mode
ey gigantic capitalist enterprises-the big railroad
is steamship companies, colossal industrial trus
us and combines-with means, tremendous sums a
ic necessary which cannot be supplied by any sing
lal bank. In one and the same group of capital e
terprises there is invested more and more t
=