Foreign Debt and the Workers
The continuance of the world depression drives the spokesmen of capital to all kinds of shifts to account for the trouble, and for the growing army of unemployed.
One of the “explanations”—the international debt question—is very much to the front just now and causing much heartburnings to small investors, who see their savings dwindling under the stress of the economic situation. The latter are always the most vulnerable material for the propaganda of reduced taxation, and while they throw up their hands in holy horror at the suggestion that Ireland should be so unprincipled as to back out of previous debt arrangements, they wholeheartedly support the idea of repudiating England’s debt obligations to America.
The matter is one that concerns the master class exclusively and is no concern of the working class. It is just a question of which group of masters shall reap the principal share of the surplus wealth wrung from the workers and is simply the peace-time reflection of the war-time process. Incidentally, the anxiety of the capitalists to get rid of their foreign debts shows the absurdity of the Labour Party argument that the capitalists can pass such burdens on to the backs of the workers.
The present international debt ferment originated in the capitalists of one country giving credit during the War to those of another. country for war material, on the understanding that the lenders would obtain substantial interest for their obliging conduct. Many years have passed since the debts were incurred, and the material that was purchased, being of an unproductive nature, mostly went up in smoke—carrying multitudes of workers with it. The capitalists of the debtor countries look with growing dismay at the constant drain on their profits caused by the recurring interest payments on this unproductive expenditure, and with still greater dismay to the dwindling prospect of getting rid of the capital burden for a long time to come. Consequently, by emotional appeals, veiled threats and various financial dodges, they seek to cajole the creditors into allowing them to back out of their “sacred” pledges and to throw overboard as much of their liabilities as possible. It is just another aspect of the shady side of commerce,
The international intertwining of business relations helps the debtors’ game. This was well illustrated by the financial conduct of German capitalists a year or two ago, when they threatened to go bankrupt if forced to meet certain short-term loan obligations. The creditors were faced with the threat of losing all if they forced the immediate payment. While the creditors politely fell out among themselves, Germany just smiled and sat tight.
In the middle of the present debt discussion a report came through from America which pointed again to the real source of low prices and business depression—a too lavish nature and a too highly developed productive force for a social system based on production for profit instead of production to meet the needs of all. The following quotation is from the Evening Standard for December the 9th, and appeared under the heading, “Another Cotton Crop Shock”:—
The market estimates of the American cotton crop this year have been all along quite out of touch with actualities. Successive shocks have been administered by the monthly publication of the official estimates, which have been well in excess of private forecasts. The biggest shock of all has come from the latest Bureau report just issued.
This estimates the crop at 12,727,000 bales, an increase on last month’s official estimate of 780,000 bales, whereas the market was looking for, at most, an increase of about 250,000 bales. As a consequence the price in Liverpool has fallen from 5.64d. per lb. a month ago to 5.03d. per lb. now, while the price in America has dropped from 6.30 cents to 5.75 cents per lb.
Evidently the private estimators have misjudged the probable effect of weather conditions and the possibilities of boll-weevil damage. That the latter has been very small is demonstrated by the high average yield of 162.1 bales per acre.
The settlement of the debt question will not of itself set the wheels of business turning rapidly again. The easing of that problem is reserved for bankruptcies and the boll-weevil.
Anyhow, from the workers’ point of view it is not unkind America or France that is the root of their troubles, but the ruthless exploitation by capitalism for the profit of the few