The daily worker. [volume] (Chicago, Ill.) 1924-1958, 1931-12-23
The United States Is Drawn Into
the World Financial Crisis
By BURCK.

Analysis of the chart shows that the curve of
money in circulation followed very closely the
curves of commodity price and business activity
indices up until the latter part of 1890 Then
it turned sharply upward and with the excep-
ton OF short period in the early part of 1881
continued its upward course in exactly the same
measure that commodity prices and business
activity went downgrade.
The last few weeks have seen slight de-
crease in the amount of money boarded. This
cam however, be disregarded in the totality of
the movement which is Enthusiastically of sharp
ly upward character. Minimizing any exagger-
ated Importance likely to be attached to the
slight decline in boarded money, D. W. Els
worth comments as follows in the Annalist for
Nov. 81:
''The peak of money Il, circulation land pre-
sumably of currency noarded) came in the
week ended Oct. "a; the subsequent decrease
though large in dollars, is a mere ripple on a
tidal wave. Every tidal wave may have a
ripple at the top, but not every ripple Is the
top of a tidal wave"
Thus the perspective is clearly for s.tidal
wave of further boarding with all of it's i'm
plcations for the increase of the inflationary
movement.
fact that the amount of boarding would have
been tremendously increased but for the mount
ing wave of bank failures. For, since one of the
most Important sources of boarded money is
bank deposits, the increase in bank failures
means that money which would otherwise be
boarded is frozen"
similar situation corfronts the capitalists
whose money has taken the form of investments
securities DRnreriat of he vol, ri oh,
paper has tied up their money almost complete
ly. Their money is out of circulation not merely
because they do not wish to reinvest it in in
dustry but because they cannot
The cheapening of credit toward which the
capitalist class looks for relief from Industrial
stagnation cannot be achieved through the me-
merely temporarily out of circulation. because
the capitalists wish it to be there but more or
less permanently because the capitalists cannot
help themselves.
All attempts to overcome Tightening of credit
caused in a large measure by boarding, lead
inevitably to initiation. The formation of the
National Credit Corporation to extend credits
to banks whose assets are frozen and who are
on the verge Of complete bankruptcy is just such
step. 1t permits the functioning of banks
which have no economic basis for existence The
credit structure thus reared is without founda-
ton and but stones throw from final collapse.
The tendencies toward initiation are further
strengthened by the projected creation of an
Emergency Finance Corporation by Pres. Hoover.
The creation of this corporation is a tacit ad-
mission that the Federal Reserve Board has
failed in its purpose to provide an elastic cur
rency and credit apparatus. It's function will
be to extend credit to corporations on collateral
which the Federal Reserve Bank refuses to ac-
cept. The question will also be brought up in
the present session of Congress to permit of an
alteration in the banking laws SO as to allow
the Federal Reserve Bank to extend credit on
securities which it has hitherto ruled out The
government. deficit of approximately two bill
lion dollars makes necessary the issuing OF
tremendous volume of offerings, the first batch
of which have already been offered on the mar
ket TO the tune of $130O,OOO,OO0.
These various developments towards expansion
at time when there is absolutely no economic
basis for it only serves to heighten the wave of
initiation that is now under way and which will
very shortly shake the financial centers of the
country, have its repercussions in mighty deep
ening and sharpening of the crisis and mark
another step forward in the march of capital
ism toward final destruction. ax.,,
N STe b soncluds& q