Paul Frölich

German Heavy Industry
and its “Vaterland”

(January 1923))


From International Press Correspondence, Vol. 3 No. 10, 25 January 1923, pp. 80–81.
From International Press Correspondence (weekly), Vol. 3 No. 3, 26 January 1923, pp. 41–42.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Public Domain: Marxists Internet Archive (2021). 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 severe crisis through which Germany is passing at the present time has broken the thin crust overlaying the decay beneath. The rottenness of the system is revealed in broad daylight. One scandal follows another. It is becoming evident to all eyes that the great capitalists are utilizing the economic and political breakdown of the state in the most shameful way for (heir own enrichment, and for seizing upon one fragment of political power after the other.

That fact that Germany has only been able to keep economically afloat for so long a time by continually lowering the workers’ wages, by the aid of the depreciation of the currency, is already sufficiently well known, but it has not sufficed to rouse the working class to determined resistance. To express this more clearly by a simile: The great capitalists, the parasitic growths on the economic tree have been enabled to live because the rottenness of the trunk enabled the sucking roots better to reach the vital sap. This consumption ofthe vital force of the people, of its living working powers, in favor of a comparatively small strata of capitalists, isin a manner a perfectly legal phenomenon.

But now it appears that the same dique of great capitalists is utilizing the terrible situation of state finances, and ths political crisis, to an even further extent, for the purpose of scandalous extortions and impositions.

The revenues received by the state from the taxes were recently made known. It turned out that in October, the workers, that is, the recipients of wages and salaries, had paid no less than 72 per cent of the income tax, and even over 80 per cent of all direct and indirect taxes. Thia was full proof of the incredible extent of the cheating practised by the capitalists with regard to taxation. It must also not be forgotten that of the turnover taxes squeezed out of the mass of consumers about 40 per cent are embezzled, and not paid in to the state exchequer at all. And the turnover tax brings in the largest amount.

At the moment of the occupation of the Ruhr valley, the Coal Syndicate raised the price of coal by about 50 per cent. As a reason for this it was stated that the rise in price was rendered necessary not only by the increased prices of materials and wages, but by the necessity of supplying the collieries with more capital. The capital required tor such purposes is generally raised by the issue of new shares, or by utilization of credit, but here it is raised by sums accumulated directly out of the increased want and misery of the consumers. A criminal enrichment of the brutal rulers of German industry! It must be noted that the trade union representatives in the Coal Syndicate also took part in this crime, and that indeed the joint workers’ and employers’ councils are nothing else than a great profit pump. The state government is also responsible, for it supervises all transactions in coal.

The government – this government of unheard of financial bankruptcy – now admits that since August 1922 it has permitted the mineowners to postpone payment of large sums which the latter had received from the consumers, and which represented coal tax. The government granted some months deferment of payments, yielding a total of over 22 milliards of marks. A social democrat has ascertained the fact that this amount has meanwhile reached a sum of 41 milliards. What this signifies can only be grasped if the development of the German rate of exchange is taken into consideration. When these respites first began, the dollar stood at about 700 marks in Germany. Now it is over 20,000 marks. It may be assumed that the taxes collected by the coal barons, but not delivered up by them, have meanwhile depreciated in value to about 1/20th. If the German currency continues to depreciate at its present catastrophic rate, and if these scandalous determents of payment continue to be granted, these extra profits will soar into the immeasurable.

The responsibility for this criminal policy falls in the first place on the former Wirth government, in which there were social democrats, and the trade union leader Robert Schmidt was minister for industry; and in the second place on the present Cuno government, which continues to plunder state finances in favor of the great capitalists.

Considering the financial position of the state, and the political consequences of German insolvency, this policy is simply high treason. But there is even worse to come. The great industrial magnates intend to plunder the state, and with it the working class, down to the last farthing. It is perfectly obvious that the great capitalists have largely contributed to the sabotage of the policy of fulfilment of war obligations, and to bringing about the present catastrophe. They are now utilizing the extreme need of the country for the most villainous extortion. Here are the facts:

On January 9the Paris Temps published the statement that leaders of German industry with Stinnes at the head, had applied, through the intermediation of industrial magnates of Luxemburg, to the French government, and declared that they would guarantee the German government a loan of 18 milliards of gold marks on condition that the German railways were pledged to them.

It is obvious that Poincaré sought to obtain the pledges by force. He occupied the Ruhr Valley. After this it was reported from Paris that Poincaré had declared to French journalists that the French government had reasons for assuming that the German government would presently recognize its former errors. The industrial leaders of the Ruhr Valley would appeal to the chancellor, and would doubtless succeed in breaking down the resistance of the government,

It is now known that Stinnes and his companions of the French and German governments made the following proposal: that the great industrial capitalists grant a loan of 20 milliards gold marks, which means, one milliard gold marks interest yearly. In return for this the German government was to hand them over the railways, it is said that both governments considered this to be a suitable basis for negotiations. The great industrial capitalists, who with the effective aid of the Social Democrats, so shamefully sabotaged the compulsory loan, will simply pay these gold milliards out of the sums won by their taxation swindles. The railways cost them nothing, and give them a complete grasp of the whole economic life. The whole state has become a mere schedule. The whole population of 60 million souls has become one army of slaves to this handful of industrial barons.

What was Panama in comparison with such corruption? Among the political parties supporting the government – from the nationalist right to the social democrats – there is never any knowing where stupidity ends and crime begins. The whole of German politics has become a putrefying corpse. The German bourgeoisie, which is full of patriotic phrases at the moment, is only living – in so far as it is still dragging on its wretched existence at all – by means of open high treason. The sentence against it must be carried out./p>


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Last updated on 26 December 2019