The daily worker. [volume] (Chicago, Ill.) 1924-1958, 1931-12-22
The United States Is Drawn Into
the World Financial Crisis

now stands at 10o4 900 marks against a
holding of 2179 992 900 marks during the same
week last year. In significant contrast to this is
the gain in the value of notes in circulation of
363,N2000 marks. Expressive of this tendency
is the lowering of the proportion of gold and
foreign currency to note circulation from 588
per cent last year, to 27.5 per cent last week TO
2S3 per cent the week of the issuance of the
Reiehsbank's statement. If we take into ac-
count also the depreciation in value of many
foreign currencies, particularly the pound, then
this ratio will be seen to be even lower since
part of the reserve ratio is calculated on the
basis of the holding of foreign currency. That
the German mark is not greatly behind the Bn-
fish pound can easily be seen. In fact only the
desperate efforts of International capitalism have
saved it thus far. That this is recognized even
by the bourgeoisie is made clear by the "Finan-
cial Chronicle" of Dec. S, which writes:
The mark remains at gold parity (?), how
ever, primarily because the balance Of foreign
payments, insofar 1t Is created by currency
ordinance, Is artificial"
United States Drawn In.
In the early stages of the crisis, American
financiers thought themselves exempt from the
memorable operation of the factors that were
making for international capitalist financial
ruin. So lightly did they discount the possibility
OF their being drawn into the international
whirlpool that opinions were openly expressed
in favor of policy of moderate and controlled
initiation" The cock-of-t he-walk arrogance of
American capitalism inveigled it into actually
believing that 1t could flirt with a policy of in
flation and not be swept off its feet! The state
of mind of American finance in those palmy
days of blissful ignorance is very well epitomized
in the report of the Guarantee Trust Co. for
Nov. 80. This organ of finance capitalism rue
fully states that:
TN the early stages of the depression, re-
peated efforts made to draw up pro-
gram designed to maintain the existing level
of prices and wages. Subsequent events have
proved that that program while 1t might have
been effective under certain conditions was
based on broad misconcepton of the far
reaching character of the changes that were
then getting under way" csThe Guarantee
Survey
While it is beyond doubt that American CAPT
talism attempted to stave off the ruinous down.
ward plunge of commodity prices by mild,
controlled initiation the statement that any at
tempt was made to maintain the then existing
level of wages is downright lie. In fact there has
been an open and brutaly callous wage cutting
drive on a national scale. This wage cutting
drive was conscious attempt to shift the losses
in profit entailed by a drop in commodity prices
upon the shoulders of the working class Wage
cuts, as will be pointed out later, are an inevi-
table concomitant of the inflationary movement.
Now, more than ever, talk of the necessity
of initiation as remedial measure is INDUCED in
by leading bourgeois economists. AS late as
Nov. 16 Babsons Report came into the open
with direct call for initiation as the only way
out of the blind alley into which American capt.
talism has run. Says Babson:
with large volume Of credit locked up
in real estate and other long term invest
ments, turn in business has been blocked.
However, the many plans to relieve this situa-
ton and break up the jam with new credit
will move business ahead SUCH ACTION
FORECASTS INITIATION WHICH is NOW
CONSIDERED NECESSARY BY MANY AU-
THORITIES TO CHECK FURTHER STAG
NATION OF INDUSTRY AND TO BOLSTER
THE WHOLE FINANCIAL SITUATION
The utter absurdty of the capitalist dream of
controlling any OF capitalisms anarchic forces
Is very evident. Tie inflationary movement once
under way pours through the tiny crevice opened
for it by the unsuspecting bourgeoisie and bursts
like torrent through the floodgatss Of capt.
talist finance
90 BE- oonSnuedA ,ssv,,