Editorial: Reparations or Revolution. (1924)

Editorial the September 1924 issue of the Socialist Standard

The World Situation.

The scramble for the spoils of war has entered another stage. The Versailles Treaty arranged the division of the plunder but the Allies have been quarrelling about the “sharing out” process. So “experts” have been called in to advise methods for a quicker “delivery of the goods.”

The working class has no interest in reparations or indemnities. The fight among the capitalists over these questions is an effort to relieve themselves of the financial cost of the slaughter which they engineered in 1914. The workers do not own property and therefore cannot pay for wars, and so the capitalists must fight it out between themselves as to how the bill can be paid. Behind the reparations question there is the ever present struggle for markets on the part of the world’s capitalists, and this struggle is keener and more desperate than ever.

In spite of military victories and vastly increased territory the Allied Capitalists are faced with a world problem which they cannot solve. The productive power of labour and the use of improved machinery has greatly increased since the war, but the market has not expanded. Not only are the rival national capitalists unable to find fresh markets, but the manufactured goods which once they could sell to foreign buyers are not wanted in countries now manufacturing for their own home market. Instead of exporting shoes to countries like Chile they are exporting shoe machinery.

Capitalist Governments like that of Herriot, MacDonald, etc., support a reparations policy in the hope of defeating the competition of Germany and so restoring the trade and commerce of the Allied Capitalist world. But each one of the Allied Nations capitalists are out to smash the competition of the other, and even with Germany “scrapped” the same problem and the same murderous struggle for markets and territory would go on. And in the rivalries and conflicts of the exploiters the workers have no concern. The workers’ interest is to abolish the system under which they are robbed of the results of their labour.

The Fraud of the Labour Party.

The Labour Party on platforms and papers throughout the country declared that the Treaty of Versailles must go.

They said in their handbook for Labour Party speakers (Labour and the Peace Treaty):

  “The commitments of Labour to revision of the Treaty have steadily grown in definiteness and emphasis during the last four years. Not only is Labour committed to revision by the fact that the Treaties, both with Germany and Austria, are in plain violation of the principles it has so often expressed during the war, but it is committed also by repeated declarations, made since the terms of the Treaty and of the Covenant of the League of Nations (embodied in it) became known.”

In complete defiance of election promises and literature the Labour Party have endorsed the Dawes Treaty which MacDonald defended and signed. Thus not only have the Labour Party supported the war, but now they assist the ruling class to reap the spoils.

After all their denunciation of the Versailles Treaty when in opposition, the Labour Party in office ignored their specious promises and promptly repudiated Arthur Henderson’s election pledge at Burnley to revise the Versailles Treaty.

The Labour Government were praised by the Capitalist Press, specially eulogised by the King, and showered with laurels by leading enemies of the workers, for their work in arranging the Dawes Treaty.

The capitalist work of the Labour Party has been admitted by its own members. Mr. E. D. Morel, writing in the “New Leader,” says :—

  “That it should have been possible for the Conservative leaders last week to affirm dogmatically that a Labour Government had re-established the authority of the Versailles Treaty not again to be questioned by any British Government, without such affirmation being queried by so much as a negative interjection, is the kind of thing which is calculated to spread the dry-rot of suspicion and disillusion in our ranks. For everyone is aware that so long as an unamended Versailles Treaty continues to be the public law of Europe, Europe will not know Peace. We have been told so by our leaders for five years, and we knew it without their telling us. Principles proclaimed for years cannot be abandoned in a night by a Party to whom principles are realities.”

The Dawes Plan.

“The Dawes plan is a plan devoid of sentiment or political or nationalistic feeling ; it is a plan which considers simply and solely the best way of getting the greatest amount of money out of Germany.”

That is the description of the Scheme by the “Manchester Guardian Weekly” (July 18th).

The process, however, of “getting the money” is to place Germany in the hands of Pierpont Morgan and other bankers who are to have the first call on German assets should there be a default in the interest. The railways of Germany are to be converted into a private company, and a huge joint stock bank set up. The Dawes plan tells the German workers that “wage increases are out of the question,” and German capitalists already hint at longer hours and lower wages.

The “brainy” capitalists and their “experts” have evolved a scheme to finance industry in Germany so that out of a larger production goods may be sent to the Allied countries, as reparations.

That policy is simply a continuance of the “dumping” process which our masters have been complaining of for the past few years. But the Dawes plan intensifies it by arranging for more goods to be given free to the capitalists of Allied Nations. Not only so, but the speeding up and greater output which will ensue in Germany will intensify the competition in the world’s markets. This peace cure of the Labour Government will not improve the economic situation. The capitalists here who support this reparations swindle will hypocritically tell the workers “You must accept less and work longer owing to German competition and their low standard of living !”

Its Economic Effects.

The economic effects of getting the spoils of war has been pointed out by leaders of the Capitalist Parties.

Mr. Asquith said : “The indemnity ships have paralysed our shipping industry, while the German yards are busy.”—(Paisley, 2nd June, 1921.)

The financial agents of the Governments, Samuel Montague & Co., declared : “The diversion of German indemnity coal to France has spoiled our market in that country.”— (Parliamentary Debates, July 14th, 1924.)

The Conservative Leader, Mr. Baldwin, said, in the House of Commons :

  “What I want to know is, where are those exports going ? The most obvious place for them to go first is into the openest and freest market they can get, that is to say, ours. Unless there happened to follow a period of world expansion such as followed the introduction of Free Trade into this country—an expansion partly due to discovery in industry, and partly due to discoveries of gold—unless you could have some world expansion of that kind, you will have an immense amount of suffering in every industrial country in the world, that receives those exports, but principally in our country. Theoretically, it is perfectly true that over a period of years the position may right itself, but the process of absorption may take many years, and the dislocation that will be caused in the highly-developed industrial communities is a dislocation that will ruin them before the absorption takes place.”—(Parliamentary Debates, November 15th, 1923.)

Mr. Hardie, of the Labour Party, replied to a speech thus :

  “The right hon. gentleman has so little understanding of British industry and British products that he does not realise that we have 1,300 coke ovens standing idle in this country, and that the workers are on the dole. Yet we have a combination of our present Prime Minister and ex-Prime Ministers wanting to bring in coke from Germany, although our coke ovens are shut down and the men are on the dole.”—(Parliamentary Debates, July, 14th, 1924.)

The Miners’ Federation have also protested about the economic effects of Reparations, but as they belong to the Labour Party they are also responsible for them.

The Coming War.

That this Dawes plan contains the seeds of further war is the claim made by Mr. Morel:

   “This reparation policy does not make for a peaceful settlement; it makes for dislocation and war. Indeed, my own feeling in this matter is that, if the Dawes Report receives the support, as it does, of a certain number—shall I say a large number?—of financiers, business men and economists, it is because they entertain the view, although, perhaps, it is discreetly hidden, that it will show, after a year or two, that the whole idea of obtaining these vast sums of money from Germany is impracticable in practice, because the Transfer Committee will not be able to transfer to Germany’s creditors, either in German currency or in deliveries in kind, the vast sums which are laid down. That hope may mature, but one thing is perfectly clear, and it is the most dangerous aspect of the whole Report, namely, that the whole of this stage-managed Conference, based upon the still continued partial ignorance of the British people of the essence of the reparation policy, and the complete ignorance of the French people of the essence of the reparation policy, is based upon the expectation held out to the British and French peoples that these huge sums of money will, in fact be obtained. That is the most dangerous thing, because, after those expectations, the reaction of disappointment will come about when it is found that they cannot be realised. That will lead once more to a revival of feeling, and the whole thing will again be thrown into the melting pot.”—(Parliamentary Debates, July 14th, 1924.)

Mr. P. Snowden represented the British Government at the London Conference, but after the congratulations to the Labour Government was over, he admitted to the Manchester Guardian (August 22nd) that the occupation of the Ruhr was illegal, and that “the French industrials have designs upon the economic control of certain German industries which they make no effort to conceal.”

The Socialist Position.

The general effects of the present Treaty will not be to improve labour’s condition anywhere. German capitalists will make sure of their profits, and, with the assistance of the bondholders of allied countries, will squeeze the last ounce of work out of their slaves. The workers in allied countries will find unemployment increase due to payment of reparations in the form of goods. The workers will have to face world wide efforts to make them work harder and, with a large army of unemployed, wages will be cut down further.

There is no escape from the effects of private property in the means of life. The system is based upon trade for profit, and as competition for trade increases, more scientific methods of production are employed and fewer workers are required to do the work. An ever-increasing part of the wealth goes to the employing class, and thus class distinctions become more glaring. The world’s resources, whether in the Ruhr or elsewhere, are eagerly struggled for in the effort to get the world’s wealth into fewer hands.

No reparations policy can touch these facts, which are the result of the rule of capital. This intervention of the banking interests into the fight for the spoils of war shows how international that rule of capital is. The Labour Government’s unity with Pierpont Morgan & Co. may be explained by the Daily Herald’s editorial (March 29th, 1924), which said :

  “The policy of all capitalist countries is, in the last resort, controlled and determined not by the politicians but by the economic and financial powers whose creatures they are.”

The Present system is beyond repair. Only a revolution can abolish the “evils” of to-day. Hence our demand is not Reparations, but a Social Revolution !