PAGE THE MILITANT SATURDAY, OCTOBER 24, 1931 LETTER TO COMRADES BY LEON TROTSKY EDITORIAL NOTES The Question of Workers Control of Production commended THE BANKING CRISIS IN THE UNITED STATES LAYING THE FOUNDATIONS of the Communist youth in America are (Continued from Last Issue. Russia) or in the Fascist counter rev. However, it must be approached correct question and at the same time of the already enrolled in the ranks of the OpThe epigones have purely mechanle Olution, which establishes the naked de 15. Advanced without the necessary pre study of the concrete conditions of the ing bock on the Chinese revolution, which justified and necessary, With the publication of the forthcomposition. bold step forward is now ally accepted the idea that workers contatorship of capital (Italy. It is preparation, as bureaucratie command, struggle for workers control. The op the Pioneer Publishers are now getting trol of production, like Soviets, can only cisely in Germany, with its strong soe the slokan of workers control may not position, on a small scale and to a modthe American see If the youth work the opposition to be carried out under revolutionary con ial democracy, that the struggle for the only prove to be a blank shot, but dis est degree corresponding to its forces, tion of the opposition will record an now undertaking on a wider scule has ditions. Were the stalinists to attempt workers control of production will incredit the marty even more strongly in must take up the preparatory work which other substantial achievement. It be an admittedly experimental character, to bring their prejudices into a definite all probability be the first stake of the the eyes of the working masses and was characterized above as the next taak longs among the fundamental and moet the same can be said with no less Justice system, they would probably argue as revolutionary united front of the work dermine the confidence in it also of of the party. On the basis of this task, important Marxist documents written in of all that has been attempted up to now follows: Workers control as a sort of ers, which precedes the open struggle for those workers who still vote for it today. the Opposition must seek contact with International sinee Lenin departed from the Comintern. We maintain that the without political dual power in the counits leadership. We have regarded the problem of effective work among the try, which in turn, is inconcelvable with Should the slogan of workers control. slogan is raised, the situation must be factory councils and in the trade unions publication of all these historic docu youth has not yet been solved in the out the Soviets being counterposed to the however, be raised right now? Is the rend well and the ground for it prepared. explain to them our views of the situa a revolutionary situation ripe for it? We must begin from below, from the how our correct views on the develop tion as a whole, and learn from them tasks. The volume on China rounds out gime of the epigones it has been eynie inists would conclude the slogan of is no measuring instrument which would tions must be serutinized and adapted to the relationship in the factory and the great series of books and pamphlets ally mismanaged and abused. They have workers control of production is ad from the pen of comrade Trotsky in the best corrupting and perverting the rev. missuble only simultaneously with the permit the determination, once and for to certain typieni Industrial, banking and the two relativo situation. One is compelled to check it cases of speculation must be taken as From all that has been said above, it up by deeds, in struggle, with the aid a point of departure, veiled lock outs.
time among the classics of our move caucrats as Fagin trained young thieves.
schematic of the most variegated measuring in mendacious diminution of profits aimed only it occurs to me that the Staliniata ment. It is with such weapons that the What wanted the education of a proceeds clearly how false.
proletarian wing of the party will fight cadre of frank and honest young worker and how lifeless is such a construction struments. One of these Instruments, at reductions of wages or mendacious ex night make the following objection: you wanted to close with this, its way to victory. By its stubborn con devolutionists able to organize and lead In practise, it results in the unique ult. under the given conditions perhaps one aggeration of production costs for the centration on this simple and prosaic a proletarian mass movement. This taskmatum which the party puts to the of the most important, is precisely the same purpose, and so forth. In the fac. are prepared to dismiss the slogan of work of publication, by its refusal to be belongs to the Marxian Opposition. It diverted from it by any kind of charlatan will bring new methods and a new spirit workers: the party. will allow you to slogan of the workers control of pro tory which has fallen victim to such as bitterly and branded us because at Soviets for Germany: but you criticized fight for workers control only in the duction.
promises of cheap success and easy to the work.
event that you are prepared simultanemachinations, the Communist workers victory, the Opposition is bringing its We expect that the first issue of the only to build up Soviets. But this is The significance of this slogan les must be the ones through whom are fell one time we refuse to proclaim the first, and therefore its most essential, youth paper of the Opposition the plans precisely what Involved that these primarily in the fact that on the basis the moods of the rest of the working slogan of Soviets in China. In reality.
task to a succesful fruition. In this for which are already under way and two processes must in no came run abeo of it, the united front of the Communist masses, above all, of the social dem such an objection is only base soph.
way we are laying the ideological founda which it is to be hoped will not long lutely parallel and simultaneously. Un workers with the social democratic, non ocratic workers: to what extent they ism, which is founded on the same or tions of future movement, upon which be delayed will reflect this new spirit der the influence of crises, unemployment party, Christian and other workers, can would be ready to tccept the demand anizational fetish, that is, upon the it will stand, steadfast and sure, in the and be welcomed in the youth movement and predatory manipulations of the capt. Le prepared. The attitude of the social to abrogate business secrecy and to es identification of the class essence with stormy days to come. There are people like a fresh breexe. To do this it will talists, the working class in its mas democratic workers around the fringes the Communist not bave to borrow anything from the ority may be prepared to fight for the revolutionary united front of the Com Using the occasion of particularly crannists declared at that time that there League who looked down upon this pub. Young Worker, that pallid and unhealthy abolition of business secrecy and for munists with the social democrats individual cases, we must begin to con were reasons in China which lindered the application of the Soviet form, and Wishing business and ridiculed our con caricature of grown up Stalinism at its control over banks, commerce and pro that is the fundamental political condi duet propaganda persistently with centration on it. The Opposition was worst. The aim which we and our young duction even before they have reached tion which is lacking in Germany for purely positive way of putting the quer had they recommended some other orfortunate in disregarding the pretensione collaborators aspire to is to make a reall an understanding of the revolutionary the immediate revolutionary situation. tion, and in this way measure the power united front of the masses, one more adagnizational form of the revolutionary of those who talk only of spectacular youth paper, to interest young workers conquest of power.
The presence of a strong Fascism is sure of resistance of social democratic conuildertakings and overlook the essential and not to command them, to convince ly a serious obstacle on the road to, servatism. This would be one of the aptable to Chinese conditions, we would Two Ways Out task in hand. First things come first and educate them and not to herd them victory. Yet, Fascism can retain its best ways of establishing to what degree naturally rave met such a proposal with There are illustrious examples of the like sheep for a faction that has no Taking the path of control of propower of attraction only because the the revolutionary situation has ripen the greatest attention. But we were re samo point of view. The founders of ideas. No pretensions, no diplomacy, no duction, the proletariat will inevitably proletariat is split up and weak, and be ed.
to replace the Soviets with the Kuo Min Tang, that is, by the en scientific Communism, who had a few high politics, no slavish aping of the big have to advance further in the direction cause it lacks the possibility of leadideas and even some great ones, were not talk of the elders, but a young Cummun of the setture of power and of the means in the German people on the road to ground nesumes simultaneous theor talists. The dispute was over the clase The preliminary of to enpiabove the simple task of assembling the ists paper for young workers.
technical means to publish their doctrines In deciding to call the new paper Young of raw materials, of markets alternately tionary united front of the working clase etical and propagandistic elaboration of content of an organization and not over when that task stood first on the order Spartacus, the Joint committee has en lead the control beyond the walls of the already signifies, in itself, the political the question of the party, a serious and its organizational technique. But we of the advanced must promptly add to this that precisely of the day. In the trial number of the dowed it with an inspiring historic name isolated enterprise. In a country as death blow for Fascism.
workers, in the first place, of the fac in China there were no subjective obKommunistische Zeitschrift, issued in The name of the great leader of the highly developed industrially as Germany.
For this reason, be it said in pass tory councils members, of the promin. stacles at all for the Soviets, if we take September 1847 under the direction of colossal slave revolts of antiquity was the questions exports and importing, the policy of the Communist Party ent trade union workers, etc. Only the into consideration the consciousness of Marx and Angels, one can read the mothe banner around which Liebknecht and alone suffice to elevate workers control of Germany leadership in the question course of this preparatory work, that is, the masses, and not that of Stalin allike the one which has engaged our er guard of the German proletariat. It and to counterpose the central organeeriminal character. The most rabid toe what moment the party can pass over Wang Chin Wel. The Chinese workers forts: can well become the symbol of the re of workers control to the official organs could not have thought up a surer way from propaganda to further Both intellectuals and manual work volt of Communst youth against the of the bourgeois state ers promised their collaboration (in pubs corrupting influence of Stalinism, and irreconcilable contradictions of the hot inciting the social democratie work and to direct practical action under the traditions. The enthousiaste for ser towe let Union was truly universal. Even the present lay peasants movement in lest after a very short period of activ. The name Imposes obligations. We are accentuated to the degree that its sphere of holding up the progress of the policy.
The polley of the Left Opposition in China trives to adopt Soviet fornis ity, publicationsbould cease for lack convinced that the young militants of the of influence and its tasks are extended, Necessary Prepartions this question follows clearly enough from all the more general was the striving of funds. It was finally suggested that opposition will fulfill them. In their thereupon to show themselves promptly what has been presented, at least in its of the masses for Soviets in the years we acquire a printing press of our own creat undertaking they will have the unas intolerable. way out of these con Now this mistake must be made good essential features. It is a question in 1925 1927 so as to give the venture a more stable qualified support of every member of tradictions can be found either in the again. The slogan of workers control can the first period of propaganda for the foundation. subscription list the Communist League. capture of power by the proletariat be of extraordinary aid in this regard. correct principled way of putting the August 20, 1931.
opened. and in a short time the sum of 25 pounds was collected. The money frequency of bank failures, and by banksy circulation of capital which is the funda of a foreign bank. of which nearly 80 permitted us to have the necessary type brought from Germany: our compositor themselves, who have need to keep more mental function of a bank.
went to France.
members have set up the issue gratuit The low interest rates prevailing Im The bility of an unexpected rum. The latest posed little penalty on the banks for banks to do was to reserve their prething for the Federal Reserve ously: and here in actual fact is the first number of our paper. We still lack Federal Reserve statement, for Oct. 14, these overcautious policies, but instead, vous policies. Instead of buying cov 1931, shows money in circulation of actually made it harder for the capl ernment bonds, they sold: last week a printing press, but as soon as we have money we intend to purchase one. Then billions. year ago there were in cirtalisk to borow than before. Whatever alone they sold 11 millions these culation billions. Considering the ex. good loans they had they keep to them bonds, breaking the market in some isour printing establishment will be in al position, not only to run off our newspa(Continued from page 1)
In June 1921, loans constituted 67 of tent to which the crisis has deepeed dur selves, instead of turning them over to sues and points in a week, a terrific per, but likewise to print the pamphlets So far as volume of industrial produe the total assets of the national banks necessary for the defense of the proletion and wholesale prices go, therefore, by 1928 the percentage had been reduced reasonable to expect a drop in circula de Hederal Reserve banks either by re decline for u. bonds, along with the discount or selling brought out by the fact that the tariat.
the creation of paper values in the form to less than 50. During the same per tion of several hundred millions dollars Increased Gold Need was selling. Instead of keeping That is the way we are propeeding of bank deposits and of bank credit, iod, investments increased from 20 to Instead of an increase of a billion. About The large amount of Federal Reserve interest rates low, they raised the re too. We also undertook to print the short term in the form of loans and dis 26.
In other words, the banks were tending evidently being hoarded, mostly in the notes outstanding, as a result of hoard discount rates full each in two when pleletanete in the defender of vestments, ran ahead of the production to lend less, and put more of their money form of Federal Reserve notes, rather in the relatively large deposits of mem ruce sal ve weeks, bringing the New York means and with economies and sacrifices of real commodity values. In short, into securities of the loans themselves, than gold. On Oct. 14. 1931, total gold ber banks with the Federal Reserve rate up to 1. and carrying all otheke not unlike those described in the Kom generally speakin the period was one in 1921, 23. were secured by stocks reserves in the Federal Reserve system banks, as a result of the banks polics forms of short term interest rates, par.
munistiche Zeitschrift, we have accomof financial plished a part of the task. And we are This must be understood, however, ed. Of the loans secured by stocks and the year before: General Reserve bank and deposits, meant that Federal Rep with them. The commercial paper still working along the same line not merely formally, but dialectically, bonds, were seeured by gov. notes, however, were outstanding in the serve banks would need great quantities rate for to months paper, which in its relation to the development of ernment bonds in 1921, by 1929. amount of billion dollars against of gold to maintain the minimum legnt had been steady at since June reserve requirements of 35 against de now 4 2.
cap. talism in America during this period Simultaneously, the proportion of loans billions a year ago As a result, the banks have been more to a higher level, that of Imperialisin. represented by ordinary commercial loans This increase in note issues, based on posits and 10 against note issues. As the 40 gold reserve is al eager to lend money the penalty for HAIL, YOUNG SPARTACUS!
Leninist sense which include fin declined from 69. in 1921 to 48. in hoarding, was all right as long as kolal to the note when the Federal Reservel keeping bank funds flle in cash is now One of the first positive results of ancial concentration toward the forma 1920. Remembering what was said to kept coming into the country. The gold minimum at least, instead of 2 of to our national conference is the discussion tion of a financial Oligarchs, increasing the previous article of this series, that holdings of the United States, which banks can make up the additional 60 with the newly appointed National Youth Ing hegemony of finance capital over capicial transactions or upon u. govern steadily increased to billions in 1932: of eligible commerical paper. The leas Heserve banks, as of Oct. 14, 1981, had Committee, to lauch an independent club tal as a whole. This involves the transfor young workers in New York and to formation of increasingly large proper with the Federal Reserve banks, it ancing of foreign countries in 1925 to have the more told they need to the market, together constituting 15. 1931 the for Federal Reserve notes, of 1, 358, 000, have to decline point they increased steadily until by the For example, on Oct.
paper. With this the Communist League and bonds, facilitating bankers control. ble for rediscount 000, against 1, 045, 000, 000 a week ago will begin Lenin says. Finance capital, concen during this period, from 80. in 1921 first week of September 1931. American twelve Federal Reserve banks combined and 285, 000, 00 a year ago which will call out the intense interest trato in a few hands and exercising to 19. in 1929.
Its gold reserves (including lawful and warm sympathy of all who fight virtual monopoly, exacte enormous and in circulation, to which should be added money such as national bank notes)
The foregoing makes clear the extent highest figure in history, and fully under our banner. far as we know some 400 to 500 millions of notes iswere 2, 504, 000, 000 on Oct. 14, 1031, of companies, issue of stock, State loans, securities during the big boom was based The Federal Reserve banks utilized sued but not in circulation, kept by the 3, 126, 000, 000 a year ago an organization and to come out with oligarcules and levying a tribute on the sequently the extent to which the fine. by keeping money rates low, using the having to pay out gold or gold certificates the system therefore lost 200 On the same millions during the week, but because of ian youth. We are pioneering on a new high rate of profit from the issue of on the security Inflation accompanying in the previous article, manipulation of 200. 000 or discounted bus, and 185, 000, the addition to its holdings of eligible field in the world wide struggle of the securities, which is one of the chlet the boot.
the rediscount rate and the purchase of Marxian wing of the movement. But all functions of finance capital, plays a large Another feature of the same situation position unimpaired. The test of the or total eligible paper of 305, 000, 000 in the open market, thus pumping money selling thels into the market to pay for their pur for counter cash would leave total legal requirements. The free gold of we are confident that the results will of the financial Oligarchy. Imperial which were successfully gold position of the is the free Taking the lower of the two figures) gold or excess of gold reserves over quickly vindicate it.
ism or the rule of finance capital in stocks and bonds at high prices to in chases.
The situation and the special problems which this separation of finance capital vestors, used the cash which they to The rediscount rate of the New York eligible paper at only 22 of the total the system on Oct. 14. 1931, mounted confronting the Communist youth are from industrial capital reaches vast celved, first to pay of bank loans, see not the same as those of the adult move. proportions. The supremacy of finance ond to put their treasurles in such posle Federal Reserve Bank, which had been notes issued. Iather words, since to some 670, 000, 000, about the same as issued, the effective min a year ago, in spite of the increase of a week ago, and only 00, 000, 000 less than ment, or at any rate they are not exactly capital over all other forms of capital tion that they have less need than ever 2 at the beginning of, 1930, wa gold plus elixible paper must equal the the same: and it is from this elreum means the rule of the investor and of before to borrow from the banks for torced down to by the end of the amount of note their ordinary commercial transactions, year, and further reduced in April, 1931. imum of gold reserves requirements a billion dollars in note liabilities.
stance that different tactical and organi financial oligarchy.
against note issues as of Oct. 15. 1931, So far, therefore, we find that the dezational methods flow. The ova! Between 1921 and 1930, there were is. This further intensifles the tendency for to 1 the lowest rate in history.
The theory of the maneuver was that was 78 percent, and not 40 percent. be tense of the gold standard has been suc youth remain as the conference sued in the United States over billion, the banks to have relatively little com the low interest rates would tempt capt cause of the insufficient amount of eligi cessful in the face of buse bold exports ble paper, in turn due to the fact that and a vast amount of hoarding of money, tion said faction of the Young Com. dollars of foreign government loans. mercial paper among their assets, atalists to borrow and make the banks the banks were loaded up with ineligi The defense has cost so far, severe munist League as our organization is a 333 billions of corporation securities, of relatively large amounts of Anance pe ble finance paper.
break in government bonds, What actually happened was that, in faction of the party. But the relation of which 19 billions were stock and 31. per, based on stock and bond transac eager to lend.
forees and a number of other conditions billion bonds, including billions of tions This situation, as said above, was per tightening of money rates, and an exFinancial Effects of the Crisis view of the fear of the public, which was fectly comfortable as long as gold kept tension of Federal Reserve credit on an Comparatively little of the loans based pulling out deposits and harding bills. coming in. When England went of the enormous scale on very short notice. orable for independent action up to alities, which should be deducted from the certain point.
13. billon total; and millions of real on this inflated paper has been paldorf and the sharp decline in prices of in gold standard on Sept. 20, however, a an artificial basis. Still, the immediate vestment securities based on the con sharp reversal of the gold flow set in emergency is being overcome.
Stalinism has wrought devastation estate mortgage bonded.
enough in the party, but in the Young This tremendous outpouring of capital standing at the end of August 1931, 14. tloued low profits of corporations, the The English capitalist, after a deprecia The final article of this series will Communist League the results have been did not represent actual savings, or real billions of loans and discounts, against banks themselves felt their position, tion of 20 in the pound, found his Am disenss the immediate perspectives for dollars the further development of the banking the Marxian edudeational work of the but rather paper values created by the lions in August 1923, near the peak of bonds, and with loans based on stocks worth 20 more in pounds than before. crisis, with their probable hearings on sponse, speaking proportionally, in the between the increase in industrial pro bank credit, in long term favestmenta ingly, they began calling in old loans, francs, correspondingly weighed 20 FIELD.
amounts with more in pounds than before. Similarly the adult organization. And this is not mad credits, this was a period during August 1920 to 6:3 billion in August new loans, holding back from new loans with the other European nations which without valid reasons. The youth are which paper values rose faster than real This in the face of a very rapid de their cash reserves, TIE MILITANT their holding It paid them to sell American secur Published weekly by the Communist not, and in the nature of things cannot. values Bank Assets preciation during these two years in the of such assets be weighted down with as hard and heavy a crust of bureaucratie cynicism To confirm this, let us examine the prices of stocks and bonds meant that readily exchangeable for monescover. commercial proper, or anything else League of America (Opposition at 84 East 10th St.
as is the case in the party. The youth character of the assets of the banks, the banks were not taking their losses ernment react more sensitively to revolutionary and see what changes they underwent and writing off their loans, but have the most recent statements of some of ceeds in gold, and remit them to France EDITORIAL BOARD ideas. The youth are the barometer, as during the boom. We shall contine our been consistently fighting to maintain the the largest banks in New York City have to settle their obligations payable in their participation in the been showing to to 60 of their total and bonds were heavily sold, commercial Martin Abern James Cannon Fratele against bureauetation in 1928. 10 of the resources of all banks com boom and consequently obtained from the resources in cash or assets equivalent park to began to appear amore freels in Max Shachtman Maurice Spector An our experience in America supportsbined, because they are under the juris increased proportion of the effective ecmore out of the banking business, and the market, and gold began to leave the Arne Swabeck States for France. Up to Oct.
there are two come boasting the water action of one mythority the comptroller en omfanget boere unter During the crisis, there has been mani merely serving the same purpose as an 17, over 650, 000, 000 had been exported Subscription rate: 00 per year; fornever deceived ourselves or others with of the Currency, rather than the eigh 50. Wive cents per copy.
exaggerated claims. But we can say banks, regulated by 48 sets of banking tested a great tendency to hoard money, old sock, as a place to put money into, or earmarked (removed from domestic both by little depositors, scared by the without participating in the process of gold reserves and held for the disposition Bundle rates, cents per copy with absolute confidence that the flower authorities.
we will be the first section of the Inter Over increasing pronts from the floating to which the enormous distribution of half billion higher than a year ago.
national Left Opposition to form suchete, tightening up the grip of financiall on manufactured bank credit, and con this situation to try to stimulate business banks as counter cash to swalal against 193. 000. 000 a week ago and the circumstances warrant the step, and part in the development and stabilization was the fact that many corporalons commercial paper and government bonds 1000 of bills bought in the open market. per was able to mgintain its reserve