MIA  >  Archive  >  Varga

E. Varga

Economics

Ruhr occupation –
German and French economics

(29 March 1923)

From International Press Correspondence, Vol. 3 No. 30, 29 March 1923, pp. 234–236.
Also from International Press Correspondence (Weekly), Vol. 3 No. 12, 29 March 1923, pp. 186–188.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

If there really were some people still naive enough to believe that after the world war, conflicts could be solved by the League of Nations or in some other peaceful manner, trance’s military proceedings must have sufficiently convinced them by now that within capitalism conflicts can only be solved by force. What is going on in the Ruhr area at the present time is war: the war of an unarmed population against an armed enemy.

Before considering the question of the economic significance of the Ruhr area, and of the consequences of the occupation for German and French economics, we must first emphasize the fact that in this case the same illusion is prevailing as during the world war. At that time there existed a general belief that a world war could not last longer than a few months, that modern economics were so internationally interwoven that it was impossible for a war to last longer. Experience shows that a world war can last 45 years. And in this case: it was believed that an occupation of the Ruhr area, attended by a cutting off of the supply of Ruhr coal, would lead to a speedy catastrophe in German economics. How often was it repeated, by the bourgeois press of Germany, that a railway strike for instance, or a coalminers’ strike, would bring about an immediate catastrophe in the economic life of Germany, and must therefore be avoided at any cost. But now experience shows that after more than two months of Ruhr occupation, and after supplies of Ruhr coal and iron have ceased for six weeks, there is no thought whatever of a catastrophe in German economics. This proves, in the first place, that this pretext for combatting labor movements is based on a lie, and, in the second place, that German capitalist economics are exceedingly elastic.
 

The coal and iron problem

The purpose of the Ruhr occupation is stated by France to be the necessity for getting pledges from Germany that the reparations are paid regularly. These are the “productive pledges” which France sought to obtain by occupying the Ruhr. But besides this financial aim, another factor has been decisive for the occupation, that of the Special interests of French heavy industry. To make this clear, the following figures may be adduced:

Even before the war France had a large excess of iron ore as compared with her coal. A great part of the iron ore produced on the Lorraine frontier of France had to be exported, and was smelted in Germany. After the war, the disproportion between iron and coal in France became much greater. French coal production has been diminished by the devastation of the mines in Northern France by the Germans; on the other hand, France’s output of 'iron ore has been enormously increased by her possession of Lorraine and its ore mines. The change which has taken place may be gathered from the following collective statistics for the whole of Europe, taken from Economic Statistics:

In 1913 the total coal output of Europe was over 600 million tons:

With the present political boundaries, the coal output of Europe is distributed as follows:

Thus the coal output of France has dropped from 44 millions tons in 1913 to 31 millions tons in 1922.

The output of iron ore, which has developed in the opposite direction, is shown by the following:

Europe’s output of iron ore, which amounted to 107 million tons in 1913, was distributed as follows:

By the loss of the Lorraine Minette, and by the surrender of the districts in the east, German iron ore production has dropped from 28.6 to 7.3 million tons (compared with 1913), i.e., by about three-quarters; France’s output on the other hand, has about doubled.

The following table shows the distribution of iron ore production in the present political districts, before and after the war, for the whole of Europe:

From this may be seen that France’s iron ore production from her present areas amounted to 40% of the total iron ore output of Europe in the year 1913. The result is thus:

7% coal output as compared with 40% iron output.

It must be further observed that the quantity of minable iron ore (in the earth) is now in France’s hands to a much greater extent than before: France, within her present boundaries, possesses

53% of the total iron ore reserves of Europe.

It is this disproportion between coal and iron which has induced French heavy industry to force an imperialist policy on the French government in the Ruhr area.

Naturally it is possible to imagine a state of affairs in which the Lorraine ores would be smelted in the Ruhr area again; and the blast furnaces of Lorraine could be provided with Ruhr coal and Ruhr coke; the new frontier lines have not altered the geographical and transport conditions in the least. But the real question is the determination of French heavy industry to extend its influence to the whole Rhenish-Westphalian heavy industry, in order to obtain a monoply over the continental European iron industry (the heavy industries outside of Germany – Poland, Czecho-Siovakia – are powerfully influenced by French capital). French heavy industry has not been driven into its present policy by necessities of production, it is actuated by the desire for monopoly and for political power.
 

The economic significance of the occupied territory

It must be specially emphasized that great tracts of Germany were occupied by the Entente before the occupation of the Ruhr: the Saar district, the district on the left bank of the Rhine, the bridge heads. If we include the Saar area, the territory at present occupied is 34,573 square kilometres in extent, and has a population of about 12 millions, that is, the filth part of the total population of the country. But up io now the occupation had little effect on Germany’s economic life, for the traffic had been kept open between occupied and unoccupied territory, and all territory remained under German administration, taxation, financial control, etc.

All this is changed with one stroke by the Ruhr occupation for all these districts are now cut off from free economic intercourse with Germany in respect to products of heavy industry.

It must be remembered that the Ruhr area is the very heart of German coal and iron production. It is the most industrialized district in the world. There is no district in the world, with so dense a network of traffic as the Ruhr area. [1]

The following survey gives an idea of the coal output of the occupied territory:

Thus approximately 85% of the total German coal output falls to the occupied territories, and of this, 71%, or about three quarters, to the Ruhr area on the right bank of the Rhine.

With respect to the production of iron and steel, we have data for the year 1920 only, no statistics having been published for later years.

The following table shows the importance of the iron and steel production in the occupied territories:

From this we see that Germany has been robbed of about 80 % of her iron and steel production by the occupation of the Ruhr area.
 

Consequences of the Ruhr occupation for German economics

The distribution of the coal produced in the Ruhr area is as follows:

About one third of the coal produced in the Ruhr is coked in the Ruhr area itself. The coal output of the Ruhr area (including that of the collieries on the right bank of the Rhine) during the eleven months from January to November 1922 amounted, in round numbers, to 89 million tons, and was distributed as follows:

Of the 49 million tons of coal sent away and the 22½ million tons of coke, the distribution was as follows:

The cutting off of all export of coal and coke from the Ruhr area has naturally involved severe losses for Germany. But the harmful effects of this cessation of coal supplies is felt much more slowly than was predicted. It is probable that the constant threats of occupation of the Ruhr area put the German capitalists on their guard, so that these had provided themselves with a good stock of coal. Moreover, the production of lignite has been energetically increased, and a great part of the shortage is compensated by the import of English coal.

In 1922, the import of English coal had already reached 8.3 million tons – almost that of the year 1913. We have no comprehensive data on the import of English coal since the Ruhr occupation, but there is no doubt that it is very high. At the present time American coal is also being imported by Germany, it is characteristic for the anarchy of capitalist economics that the same ships which carry English coal to the United States, bring American coal with them for Germany ou their return journey; this is reported by the English technical journals.

The alarming stagnation of German economics at the present moment, expressed by the great increase of unemployment and part-time, is not an immediate consequence of the Ruhr occupation; it is the continuation of a downward process which began six# months ago, and has been rendered more acute by the stabilization of the mark which took place a few weeks ago. But although the Ruhr occupation and the cessation of coal supplies has not yet led to catastrophic results for Ger-nun economics up to now apart from the Ruhr area – this does not by any means signify that this state of affairs could be borne permanently by German economics. The store of coal will soon be exhausted, and the import of English coal cannot in any way replace the shortage of Ruhr coal; neither is England’s production large enough to do this, nor is Germany capable of raising the money required for the continuous purchase of expensive English coal.

With regard to the economic position in the Ruhr area itself, we must admit that no reliable data are obtainable. It is probable that the coal output has diminished very considerably – probably to less than naif of normal – and that this coal is coked in the Ruhr area itself, and used for smelting the existing and imported iron ore, and that the iron goods thus produced are placed on stock for the present.

The Ruhr occupation and French economics. However incredible it may appear, the consequences of the Ruhr occupation are at the moment much more disastrous for French than for German economics. The French iron industry is completely dependent on German coal and German coke. Only very small reserves were on hand, have now been used up, and a large number of blast furnaces in the east of France, above all the Lorraine works, have been compelled to shut down for lack of coal The total amount of coke required monthly is about 700,000 tons, only a very small amount of which is produced in France itself, or is repheed by English or Czecho-Slovakian coal. The position is best characterized by the following survey given in L’Usine, the periodical of the French iron and steel industry:

“We have now been in occupation of the Ruhr area for a month, and the situation of our iron industry is becoming more and more critical every day. When the government decided to adopt compulsory measures against Germany, it sent official notice to our industrial undertakings to make the necessary preparations for taking over large amounts of coke. The results are sufficiently well known. We entered the Ruhr on January 11, and since January 19, our industry has not received a single ton of coke from the Ruhr area. Our factories are working today at about 60% of the January rate, that is, at 30% of their normal production. We are continually being compelled to extinguish additional blast furnaces, and the situation has every prospect of becoming worse.

“The majority of the works are running scarcely a quarter of their blast furnaces. The small reserves are completely exhausted It must not be forgotten that ihe German deliveries were always in arrears, so that it was impossible for our industry to take precautionary measures against possible crises, quite apart from the fact that it was never consulted.

“When German or pro-German newspapers, attempt to represent the Ruhr occupation as an action undertaken at our instigation, this is very far from the actual truth. On the contrary, our industry is the first to suffer from the resultant conditions. it is precisely our industry which feels with the greatest acuteness the consequences of the policy pursued at present.“

It must not bit concluded from this that French heavy industry abandons the idea of controlling the Ruhr industry. All that is proved is the old story of the great war: that the cost of defeating the enemy by far exceeds the profits gained; that the conflicting parties ruin themselves mutually in the struggle for economic power.

In conclusion, it may be observed that the cessation of coal and iron supplies from the Ruhr area, and the consequent stagnation of a considerable part of French iron industry, have led to a temporary revival of the markets in the other heavy industrial countries of Europe. England is the greatest gainer; her coal and iron industries are fully occupied at present, and at rising prices. This is one reason why the movement against the Ruhr occupation gains ground so slowly. Czecho-Slovakian heavy industry has also experienced a revival, but it is very difficult to get coal or iron transported across Germany from here to France. Germany is the chief buyer. American heavy industry is also gaining by the Ruhr conflict at present, for French and German competition has disappeared from the world market; moreover, Germany is buying coal from America. But this revival is merely a passing phase, and will blow out with a protraction of the Ruhr conflict.
 

The issue of the conflict

It is not our task to predict the probable termination of the conflict. But one thing appears to be certain: On no account will England permit France to carry off a complete victory in the Ruhr conflict. Such a solution, which would place the whole Rhenish-Westphalian heavy industry in French hands, will not be accepted by England. For this reason, the intervention of England and America in the conflict is inevitable, even if this interference is not open, and participation will be secured for English capital in Rhenish-Westphalian heavy industry. Further, there is no doubt whatever, despite the press campaigns and the official announcements made by French and Germans alike, that continual negotiations are going on between German and French heavy industries. We consider the most probable issue of the conflict to be – provided that the working class does not succeed in gaining decisive influence on the solution of the question by revolutionary action – that the Rhenish-Westphalian heavy industry will become the joint property of German, French, and English capital. This could be made technically possible by a loan to Germany, guaranteed by England and raised in England and America, and paid over immediately to France. This would enable Poincaré to withdraw from the Ruhr affair successfully. This international loan would be secured by the real values of German industry above ail by those of the Rhenish-Westphalian industrial area, and a form would be found (for instance the issue of supplementary shares) enabling French and English capital to secure the desired participation.

This solution would probably be temporary only. The fact of the Ruhr occupation is in itself a proof that on the basis of the Versailles treaty there can be no capitalist balance or power. The political struggles for power which are expressed in the occupation of the Ruhr are again shaking European economics to their foundations, and the gradual improvement observable during the autumn months has again been erased.

*

Footnote

1. See Shadwell’s book: Germany, England, America.

 
Top of the page

Last updated on 10 August 2021