The daily worker. [volume] (Chicago, Ill.) 1924-1958, 1928-07-14
Signs Of Coming Storm


The crash of the stock market for record
drop since the declaration of the World War in
1914 following upon an almost equal drop a
month ago undoubtedly points to certain signi-
ficant forces at work both in the financial and
industrial structure of American capitalism.
These are not yet basic, but they cut both
deep and wide.
Primarily the present developments are con
lected with gold movements and with credit
operations. But these in turn are directly re-
ated if not entirely determined by the in
,reasing surplus of goods which the American
market is unable to absorb and the continued
disparity between agricultural and industrial
RACES.
Under the theory that easy money" that
S easy credit, would by facilitating borrowing
.or commercial purposes, increase business and
maintain prosperity the Federal Reserve
system has since the war adhered to a policy
If low rediscount rate. Whether or not the
ulng finance capitalists who operate through
he Federal Reserve Bank and through it con-
rol practically the world economic structure
sally believed that they could by this means
dive the fundamental contradiction of CAPT
alism, the inability of the masses under a
Money economy to buy back the product which
hey create, is not important. The program
f encouraging business by tremendous credit
tensions, installment 5uyings low discount
ates, nevertheless, met with the inevitable wall
the surplus value which the working masses
0 not, of course, receive and which the CAPT
alists cannot consume.
Rising unemployment, an increasing disparity
etween agricultural and industrial prices,
breed a change in policy about the middle Of
lst year. A qualified restriction of credit eff
scted by an increase in the rediscount rate was
1opted. At the same time the Federal Re-
srve Bank dumped hundreds of millions of
overnment securities on the market with the
9ject of absorbing free funds in use for either
)eculation or excessive business operations
ne heavy export of gold used to stabilize Euro
AN currencies, particularly that of France, has
ted similarly to restrict the basis of credit
>erations in this country.
None of these have suffered to solve the in
itable contradictions of capitalist economy
ne stock market not now as indicative of basic
nditions as in the past, nevertheless, in its
cord crash reflects the play of fundamental
ocesses. Referring to the sudden squirt in
II money which rose to 10 per cent on the
ock market on Monday July 2, Emerson
irt Axe, writing in the "Annalist" of July
declared:
"Under normal conditions money does not go to
10 per cent temporarily. 1t is high time that
The public realized that faced today with
credit situation nearly dangerous that of
1906 1920"
Finance capital in the United States still be-
yes there is way out of the growing dis
rity between agricultural and industrial
ices: depression in wages of labor. Ameri-
policy in recent weeks has been devised
ecifically to increase the value of gold with
ultimate aim of depressing the wage scale
d thus restoring parity between the farmer
d the wage slave.
It is an elementary proposition in MARKHAM
,nomics that this device will only add to the
isting contradictions by creating larger sur
,ses which the market" cannot consume.
American capitalism is not yet facing major
sis but it will have its hands full with the
owing youngster