The Ruhr and the Workers. (1923)

Editorial from the February 1923 issue of the Socialist Standard

Since 1918 those sections of the capitalist class which have dominated the Governments of France and Great Britain have been at grips behind a screen of apparently friendly discussion. While each group thought there was still a possibility of attaining its end through the ordinary diplomatic channels they avoided an open breach. The French Government finally appealed to armed force, the ultimate and deciding weapon of the ruling class everywhere, both in home and foreign matters, and occupied the important German industrial area in the Ruhr Valley. Some attempt is still made to keep up the pretence, and Mr. Ronald McNeill, Under-Secretary for Foreign Affairs, states that “the whole disagreement is simply one as to the best method of obtaining our common end,” and that while

  “Our French friends believe they can make Germany pay at once by seizing control of some of her principal industries . . . we are convinced . . . that such action will produce almost nothing in the shape of immediate payment, and will delay for a long time the prospect of getting money out of Germany, and possibly may destroy it altogether.” (‘‘Observer,” 14th Jan., 1923.)

An assumption is here made which it will be useful to examine. It is that the aims of the French Government are identical with those of the British Government. Also no reference is made to the conflict of interests which exists within the two countries.

Let us deal with the first point.

Up to 1914, next to cotton in order of importance among British exports, were iron and steel (including machinery), and not far behind was coal. France, on the other hand, lacked coal of a kind suitable for her iron industry, and had to import about one-third of the required supply; but she possessed big deposits of iron ore, much of which was exported. The war has altered that position because France has obtained in Alsace-Lorraine 

  “by far the biggest ore field in Europe, and the second biggest in the world, . . .  according to Eckel (Coal, Iron, and War). In 1913, the Lorraine output had reached the colossal figure of 40,000,000 tons. The whole of that field, along with some of Germany’s most modern and scientifically equipped steelworks, is now entirely in French possession. The addition of so much iron ore alone would have been little help to France, for what she needed above all was coal. That, however, was not overlooked, and the Saar mines, with an output in 1913 of 17½ million tons, were also handed to France; and, in addition, Germany was compelled to send France some 20,000,000 tons per annum for a considerable number of years as part of the reparations." J. P. M. Millar, Plebs., Jan., 1923.)

Saar coal is, however, unsuitable for coking, and therefore “the Lorraine iron and steel industry is being kept alive on the coke coming from the Ruhr under the provision of the Peace Treaty.”

Naturally, the French capitalists want the Ruhr Valley permanently, “especially as it produces not merely coal, but iron, steel, and dye-stuffs and manure.”

This explains the policy of the French Government clearly enough, but where does Great Britain stand? The British capitalists went to war because Germany was rapidly overtaking them in the scramble for markets. Germany was already producing nearly two-thirds as much coal and more than twice the quantity of steel. Did Great Britain go to war to crush one rival only to raise up another just beyond the Channel? Did they (with the assistance of the Labour leaders) murder a million workers for nothing? The “Referee” is quoted by Millar as follows:—

  "If the French plan were adopted, and France allowed to seize and exploit the rich coal and iron fields of Germany . . . she would become the dominant industrial power on the Continent.  . . . We would be up against a powerful aggressive force in the international markets and be closed out of French spheres by high tariffs  . . . but we would oppose a new industrial concentration which would be distinctly hostile and detrimental to our industrial interests.”

No, the interests of the French and English capitalists are not identical.

Now let us return to the second point, the relations between the working class and the capitalist class. The capitalist class consists of those who own the means of wealth production and the workers are those who, owning nothing but their power to labour, must sell this if and when they can find a purchaser. Having done so, that is having obtained employment, they produce commodities, the whole of which belong to their employer, who seeks to sell them and to get the proceeds in a convenient form as money. The workers receive as wages an amount less than the wealth they have produced, and the difference forms the surplus value of the capitalist class. Because of the growing productivity which comes with machine development, and because the workers cannot buy the whole of the wealth produced, and the master class cannot themselves consume the surplus, unemployment exists as a permanent feature of modern society. Because the world is becoming more and more developed on capitalist lines and purchasers for the products of advanced manufacturing countries cannot be found, competition between national groups arises, which is expressed in commercial and military wars for the capture of supplies of raw materials and for the monopoly of the relatively shrinking world markets.

What should the workers do when the capitalist governments go to war? What should be their attitude towards the French invasion of the 'Ruhr?

The Labour Party in an official statement :—

  “repudiates . . . all responsibility for approving the policy now being pursued by the French Government towards Germany. It regards this policy as an invasion of a neighbouring State in time of peace . . . and consequently as an act of war. This invasion constitutes an attack on the self-determination of the German people, as well as an attack on the rights of the working class, who are treated as mere pawns or chattels.” (“Observer,” 14th Jan., 1923.)

This interesting declaration bears striking resemblance to the statements of the Labour Party’s leaders in 1914. Under the guise of the same spurious internationalism they seek again to further the interests of the British capitalist class.

The French workers do not own France nor the German workers Germany, a condition they share with the working class everywhere. What, then, does it matter to them that France invades the Ruhr? They are wage-slaves all, doomed to toil in poverty and insecurity producing profits for their masters so long as capitalism remains. Does it matter to them whether their masters are French or German, Atheists or Protestants, whether their pay is in francs or marks? If the French capitalists plunder their German rivals, by way of reparations or otherwise, that is their business.

But the British Government does not want France to have the Ruhr, and the Labour Party, as usual, follows its masters; even after many Liberals have advocated entire remission of reparation payments the Labour Party still advocates making Germany pay (“Daily Herald” Editorial, 4th Jan., 1923), and fears that this invasion will “diminish her capacity to make reparation payments” (15th Jan.).

They talk of a “time of peace.” The class struggle goes on unceasingly East and West of the Rhine, and where is the Government which can boast that it does not depend for its stability on armed force, and where is the Government (including the Australian “Labour” Government) which does not when need arises use that armed force against the workers? Is this peace?

In 1914 Mr. Arthur Henderson ‘‘appealed to every young man . . .  to come forward and serve his country . . . to avoid coming under that iron heel of Prussian Militarism ” (“Daily Citizen,” 16/9/14), and now because the direction of British Capitalist policy has changed, this Labour Party, of which Arthur Henderson is secretary, wants the Germans who are “under that iron heel, etc.,” to be saved from coming under the “iron heel” of France, our allies in the fight for freedom.

The German workers had no “self-determination” to lose. They were and are wage-slaves, and slaves are not in a position to select their masters, nor would it be worth while if they could. They can but accept the change.

As Mr. Phillips Price has pointed out repeatedly in the “Daily Herald” (e.g., 8th Jan.), the powerful group represented by Stinnes which—and not the German workers —really governed Germany, has long done its utmost to get the French to occupy the Ruhr, and only opposed it at the last moment because a satisfactory agreement was not reached with the negotiating French syndicate. As for treating the workers like “pawns,” does the Labour Party not remember voting for conscription during the war, and has Mr. Henderson forgotten his advice to the Government in 1917 to deport the ringleaders among the Clyde strikers?

As for us, we stand where we did in 1914—for Socialism. We declared at the outbreak of the Great War “that no interests are at stake justifying the shedding of a single drop of working-class blood. ” It was true then, and it is true now, that the 

  “armed forces . . . will only be set in motion to further the interests of the class who control them—the master class—and as the workers’ interests are not bound up in the struggle for markets wherein their masters may dispose of the wealth they have stolen from them (the workers), but in the struggle to end the system under which they are robbed; they are not concerned with the present European struggle . . .  for it is their masters’ interests which are involved, and not their own.”

Letter: International Exchange. (1923)

Letter to the Editors from the February 1923 issue of the Socialist Standard

Dear Comrades,

Re answer to Mr. Hart concerning rate of exchange in, I think, the November issue, would you be good enough to make it clear how the total figures are arrived at of the prices of goods exchanged between two countries; also to whom is the gold settlement made, to balance any difference there may be? The principal difficulty to me is the fact that it is individuals who trade and not countries. Also, would your explanation cover the fall of the mark in Germany?

Yours fraternally, 

Enquirer.

Answer to Enquirer.

When using the terms “two countries enter into commercial relations,” we were using the terms in common use. Actually, of course, it is the private merchants, or firms, who enter into these relations and carry through the exchange of goods.

The difference between what is bought and what is sold is shown by the demand for Bills of Exchange in the market of the country under consideration. If the demand in England for Bills on French mediants was greater than the demand in France for Bills on English merchants, this would show, under normal conditions, that more goods had been sold to English merchants, than had been bought from them. From this it is easy to see that the total figures are not of prime importance. It is the difference between the two sets of accounts that matters.

The gold balances are paid, usually, through the Banks holding the Bills mentioned. If the Bills have been bought by the Banks, the gold is placed to their own reserves. If the Bills are 'merely held for customers the amount of the gold is credited to those customers' accounts.

The goods passing into or out of two countries have to pass through the customs departments of those countries. The quantities, weights, and values, of the articles have to be declared on forms drawn up for that purpose. These “returns” give the total figures of the trade between those countries.

All these factors apply to trade under normal conditions. At present Germany is not under such conditions. The fall of the paper mark is due to loss of credit of Germany.

So long as people believe that the paper will be “honoured”—that is, exchanged for gold upon demand, or at a specific date —the paper will circulate at approximately its face value. If this belief begins to decline, the exchange value of the paper will begin to fall at a similar rate. This process may continue until, as in Austria, the paper falls to its value as actual paper, or waste paper. The German mark is nearing the same position, owing to the great uncertainty of the future.

It must, of course, be understood that we have only dealt with the main points of the question. To cover the details of the matter, particularly in the present exceedingly complicated circumstances, would take a huge volume. If, however, Enquirer wishes to raise any other detail question we shall be pleased to deal with it.

Editorial Committee

Letter: The Ostrich Policy. (1923)

Letter to the Editors from the February 1923 issue of the Socialist Standard

Gentlemen,

Your issue of December, 1922, contains a vituperative article by J. Fitzgerald, attacking the attitude of "Plebs" on the question of currency inflation. (How it is ever hoped to attain the noble ideal of a Socialist state of society by the use of abuse will to me forever be a mystery. Lack of solidity within the Christian Church has led many people to regard Christianity as false; a smaller number who have pursued the matter further have found that the lack of solidity is in all verity due to the falseness of Christianity. Lack of solidity amongst parties who vouch for the desirability of supplanting a capitalistic state of society by a socialistic one must lead many people to doubt the desirability; only a few take the trouble to probe the matter further and find out for themselves that dissension in this case is due to superficialities only, and not to fundamentals, as in Christianity.)

I write, however, to point out that your contributor has, in the instance I quote above, let his love of abuse over-ride his adherence to facts.

I am not an economic expert ; but my reason declines to accept his contention that the total of prices of commodities governs the amount of currency required at any given time. In page 246 (first column), he states that a sudden increase in prices necessities an increase of currency. Not at all; it is the increase in the quantity of currency, or the prospect of such increase, which causes the increase of prices. That is, the wily capitalist knows that (when war is declared), through an increase in non-productive work, and work on production of articles not for sale to the general public, the quantity of currency available to purchase articles on sale to the public is much greater in proportion than in normal times. He has a natural desire to become possessor of as large a share of this increased currency as possible, hence high prices.

What your contributor contends—that prices sometimes go up before the currency is available—is correct; but the prices only go up because there is every prospect of the currency being available My reason declines to accept the argument that any shopkeeper or vendor of commodities places a price on his goods higher than, so far as he can judge, the quantity or immediately prospective higher quantity of currency available justifies. To keep within this maximum is his sole chance of doing business. If an increase of prices causes an increase of currency, we can safely presume, speaking generally, that the amount of currency in circulation will be gauged so as to just meet the situation. How, then, does your contributor account for people (during the late war) being in possession of currency with which they desired to purchase, say, potatoes, butter, etc., when no such commodities were available, and there was no prospect of their becoming available? In other words, how does his theory account for the increased quantity of currency being there when there was no price to have caused such increase? The logicality of the reverse theory is, I contend, obvious.

Before closing, as a further instance of your contributor’s regrettable lack of adherence to facts, I would point to his quotation from “Plebs” in column 2 of page 246, and his misquotation (from that quotation) lower down the column contained in the sentence, “And where in England, may one ask, can more than 20 shillings be obtained for the  £1 Treasury Note?” (The “Plebs” writer says distinctly “gold £1." Incidentally, I have never handled a copy of the “Plebs.”

Yours sincerely,

J. Hutchinson.

Reply:

Mr. Hutchinson open his letter with an entirely unsupported charge—that the article on “Plebs and Pounds” was vituperative—and follows by ignoring the facts presented in that article, claiming that his “reason” is superior to those facts, and therefore he wall not accept them.

A similar policy was ascribed to the ostrich, but it always ended in failure—for the ostrich.

Mr. Hutchinson’s question as to how the “theory” put forward in the Socialist Standard can “account for the increased quantity of currency being there when there was no price to have caused such increase” contradicts his own contention that an increase of currency is the cause of the rise in prices. Our answer is that we do not pretend to explain non-existences. At no period of the war was the total level of prices below the amount of currency. The rationing of certain articles of food and the fixing of certain prices did not make the slightest difference to this particular point.

When Mr. Hutchinson is prepared to collect and examine the facts before applying what he calls his “reason,” he may reach some glimmering of the truth. While he holds to his present method his quest will be hopeless.

The printer’s error that Mr. Hutchinson calls a "misquotation" (though it was easily seen to be an error by the most casual reader of the article) was overlooked until the issue was printed. The necessary correction was given in the January issue of the Socialist Standard.

Jack Fitzgerald