Paul Froelich

The German Government
and the Trusts

(10 February 1922)

From International Press Correspondence, Vol. II No. 11, 10 February 1922, pp. 76–77.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Public Domain: Marxists Internet Archive (2019). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.

The Lord wills it so! The German Government cries it, the Social Democrats and the Centre Party repeat it, and the Independent Socialists echo it – the Lord wills it so. And the Lord in this case is the Right Honourable David Lloyd George. He wills it and lo! it is done. Within the limits of human strength and endurance, of course, yet with a humble and hopeful mind withal.

Everything the Lord could possibly take exception to is being carefully avoided, for great is the fear of sinning. So great, in fact, that Herr Wirth, Chancellor of the German “Republic”, so-called, felt himself moved to protest that “we shall not go to Genoa with a dagger tucked away in our sleeves”. This lamb assures the world at large that he is no roaring and bloodthirsty lion, far from it! And nobody doubts it, for the poor soul has not even draped about him a lion’s skin.

And yet there would have been ways and means for the German bourgeoisie to defy the Allies, even if the power with which to do so and which was at its disposal was not its own. There is strength even in Germany’s desperate situation. Not only because its clearance sale endangers the vital nerves of the great industrial powers, but also because it can have a natural ally for the mere asking.

How best to exploit two victims is the subject of the forthcoming discussions of the capitalist buccaneers at Genoa. If Germany alone were the pivot of the deliberations, the great powers would agree among themselves as they did in London, in Cannes and in Versailles when Germany was merely admitted to sign its own sentence. But Russia is after all a power with which it is necessary to negotiate on the price it is to pay for a few years’ quiet and sustenance. With the conflicts among the Allies being what they are, Germany could undoubtedly cut a figure at Genoa if – it would unite itself politically with Russia. Instead of adopting this course, however, Germany is to continue in the role of lackey and pariah which is after all but what the petty bourgeois in power (Social Democrats and Centre Party) deserve.

The impotence of the German Government in foreign politics is the result of its weakness within its own frontiers, a weakness that is reacting very dangerously upon domestic politics. The great bourgeoisie is busily and stubbornly exploiting this state of affairs for its own ends, attacking not merely the government, but the state itself.

The utter collapse of Germany’s economic system has, apart from agriculture, which, though it is earning usurers’ profits, has not strengthened its position from the viewpoint of political economy, only benefited the trust industries (coal, iron, chemicals, and electricity) whose mushroom-like growth overshadows the sorry ruins. Their powerful position on the economic field will make itself felt in politics, at least as long as the other social factor of power, the working-class, remains crippled.

The overlords of the trusts, the Stinnes, Thyssen, Rathenau, Deutsch, etc., are more determinedly than ever professing that “l’état c’est moi!” This course is contrary to the interests of the state. Trust capital is autocratic and a bitter antagonist of Democracy. But for historical reasons and for fear of the revolution at least a semblance of democracy must be retained. Hence trust capital aims at the destruction of the state, limiting its functions and undermining its power.

Both its personal interests and those of its class are the driving force behind trust capital whose onward march towards power was facilitated considerably by the nearly uninterrupted traditions handed down from the times of the last of the Hohenzollerns, and the confusion and weakness of a republican government. The campaign was launched by withholding taxes from the government which feat was achieved by fraud and sabotage. The National Emergency Levy, so widely heralded as a means by which the trusts would be deprived of 60 per cent of their accumulated capital, remained a phantom. Even the duties on income and capital for 1919 remain unpaid today. The financial status of the federal government, the various states and the communities is nearing a catastrophe.

In its embarrassment the Government appealed for help to “Big Business”. And this Shylock asked as its pound of flesh a part of the state, the railroads. The Social Democrats, as is their habit, cried “Never!” and – declared their willingness for a coalition with Shylock’s party, the German People’s Party. The ministers, too, cried “Never!” and – entered upon negotiations with the captains of industry.

The result? The railroads are still under state control it is true, but it is equally true that trust capital with its battering rams has torn a gap in the economic fortifications of the state, these fortifications comprise among other things the great number of municipal works (electricity, gas, water, etc., etc.). Even previous to the war trust capital paralleled these municipal works with gigantic enterprises of its own. Today bad finances and political weakness compel many communities to surrender their economic possessions to private ownership. Berlin, for instance, is, for want of capital, selling its coal mines for a song. The Social Democratic President of the Prussian Diet and Burgomaster of Hannover disposed of the jetties, piers, cranes, etc., of that city for a sum far below their real value. By getting rid of their last belongings the communities hope to avoid bankruptcy, and become beggars, while the trusts cheaply secure both economic and political power.

It is becoming apparent that the endeavors to get possession of the jetties, etc., of Hannover was but the forerunner of an organized attempt on the part of the coal and iron industry to gain control of the German waterways, which scheme is secretly sup ported by the Prussian government. While this government denied to the members of the Diet all knowledge on the matter, it negotiated with the industry on the sale of the harbor facilities of Duisburg-Ruhrort, the greatest inland port in the world and the centre of the German waterways. He who controls this port controls the river and canal system of the Elbe, the Rhine and the Danube. Its passing into private ownership has already affected the state-owned railways. In the course of the negotiations, now carried on quite openly, between the Prussian government and trust capital, the captain of industry Kloeckner chided the government representatives and mockingly advised them to get accustomed io the thought “that before long government ownership will have been abolished everywhere”. That suffices to indicate the course they are steering.

The compromise regarding taxes arrived at between the parties in power and the German People’s Party, representing trust capital, appears to be a contradiction of that party’s policy. Under this agreement the capitalist are to subscribe towards a compulsory loan on which no interest is to be paid for the next three years. A searching inquiry reveals, however, that this compromise constitutes but added proof of the correctness of out argument. For that compulsory loan relieves the capitalists of the obligation to pay up the taxes on the National Emergency Levy not called in; it also exempts them from the duty to pay the large arrears of taxes on accumulated capital. It cannot be stated definitely which of the two alternatives is more favourable to the capitalists from a purely financial point of view. Nor is it to be expected that the compulsory loan will be realised before the end of this year when the political situation in Germany might not be what it is now. Whether the compulsory loan will be still on the books at that time, is a very great question indeed. The third and decisive point in favour of our argument is the fact that in reaching the compromise on taxes the government and with it the Social Democrats have unconditionally surrendered to the representatives of industry, who, not content with what they have demand both personal and financial guarantees. They claim the more important ministries and already today present the future minister of finance; they furthermore demand that the railroads be surrendered to the control of the Stinnes group, that the eight hour day be abolished, and anti-strike laws be passed, etc., etc.

And the meaning of all this? Limitation of the authors of the state, return to the theories of Manchester Liberalism, the principle that the state should not concern itself with things economic and should have no voice in commerce and industry. It is even worse than what Lassalle termed the “idea of a state of night watchmen”. The trust magnates are little by little relieving the state of the duty of protecting their property, having already instituted in their factories an elaborate police and spy system of their own.

And why not! They have power to apply what they term “justice” notwithstanding all the beautifully phrased clauses in the Factory Councils Act.

The capitalists are in every respect emancipating themselves from the guardianship of the state; they take over most of its functions and are the most powerful factor in the camouflaged rump that remains.

The ultimate aim of all these activities is the intensification of exploitation. The other half of the compromise on taxes was the capitalists’ permission to legislate a fresh series of gigantic taxes under which half of the proletariat’s meagre earnings will admittedly go to make up the budget. Meanwhile the finance status of the government has not improved, there still being a gigantic deficit in the state budget, not to speak of the reparation burden. The floating debt of the state continues to increase, a process accelerated by the activities of the paper money printing press, and the prices for foodstuffs are still soaring, while all resistance offered by the workers to this hunger policy is to be brutally suppressed. Thus German trust capital hopes to gain a new position of power in the world.

The responsibility for this state of affairs must be attributed to the petty-bourgeois cowardice and weakness of both Socialist parties who, having cleared the path for Stinnes and Co., are still working on their behalf by sabotaging every great wage dispute of the workers. It is the fate of the German proletariat that German labor has a petty-bourgeois leadership.

But in spite of this, however, the capitalists, Social Democrats and Independent Socialists alike are reckoning without their host – German labor, which though it appears today as a weak victim, is nevertheless the most powerful factor in Germany’s social life. The policy aimed at by the Stinnes group will compel the German workers to assert themselves and to fight desperately for Germany’s bare existence. And in this struggle German labor will become conscious of its power, a knowledge that will lead to victory.

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