Max Shachtman


A New Dawes Plan for the Old

(April 1929)

From The Militant, Vol. II No. 7, 1 April 1929, p. 3.
transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

THE so-called Experts Conference now meeting in Paris, in an attempt to “settle” for the nth time the question of German reparations and debt payments, has projected the most ambitious plan for American imperialist domination of Europe that has yet been presented. The plan calls for the establishment of an international debt bank for the ostensible purpose of regulating the movement of the funds created by reparations and war debts. Translated into the language of the current world financial relation of forces, the establishment of such a bank would result in the establishment of a hitherto unequalled domination of the countries of Europe especially such as the United States has never before enjoyed.

The plan becomes even clearer when it is understood that the only country at present in a position to organize and insure the maintenance of such an institution is the United States, whose enormous and dominating financial power would be immediately reflected in its control of the policies of the bank. It is not for nothing that the head of the American “unofficial” delegation to the conference is J.P. Morgan who sits in the center of the immense American financial spider web that extends over the entire capitalist world.

The proposal has left the European press breathless. American finance capital is playing its cards with a sure, firm hand, and the plan it offers is another way of informing the bourgeoisie of Europe that the U.S. has every intention of pressing the knife more sharply to their throats in an attempt to put an end to the uncertainty with which the question of reparations and debt payments has hitherto been surrounded.

American domination of such a bank – and no other domination is at present conceivable – would leave the disputed questions entirely in the hands of Wall Street. The primary function of the institution, according to the announcements, would be to “act as trustee in receiving from Germany such annuities as may be arranged and disbursing these among the creditor nations ... It also could cooperate with and act as an essential intermediary between all the interested governments and the issuing bankers in marketing such bonds as might be issued for the commercialisation of the German annuities.” In other words, Wall Street, sitting at the cashier’s window of the new bank would decide on the payments to be made to the creditor nations (England, France, Belgium, Italy, etc., etc.), the percentages, the frequency of payment, and so forth, and would further be the controlling factor in any attempt to commercialize the reparations payments. Should the plan be adopted on this basis, the entire financial structure of the nations involved would be in. the grip of the huge octopus whose head is in New York and its tentacles everywhere else.

This is all the more so since the question of debt and reparations payments is far from being a secondary question. On the contrary, it is the focal point today of the sharpening conflicts between the imperialist powers who are vainly seeking a permanently satisfactory way out of the quagmire of contradictions into which world capitalism sinks more deeply every year. On the question of reparations and debts, and all that flows from it, hinges the question of the so-called European bloc against the United States, the increasingly strained relations between the various imperialist powers in Europe itself, and, mainly, the question of the growing antagonism between England and the United States. On the consequences of the solution of the debt problem hinges to a large extent the question of the increasing Leftward tendency of the German working class and the perspectives of the German proletarian revolution.

But precisely because of all that is involved, a settlement of the question by imperialism – we mean a settlement that will actually solve these burning problems – is impossible of achievement. The establishment of the international debt clearing bank will not settle the question. At best it will succeed only in delaying for a brief period the final revolutionary solution.

Such a bank cannot settle the question to the satisfaction of France and England on one side, and Germany or the United States on the other. The German bourgeoisie demands a sharp downward revision of the reparations payments. That is, the German industrialists and bankers, with the renewed strength accumulated in the past years of rehabilitation, demand a greater share of the profits extorted from the sorely pressed German proletariat which up to now have been turned over in part to the Allied bourgeoisie in reparations payments.

On the other hand, England, whose financial condition is far from a desirable one, demands from Germany the payment of such reparations as will cover at least the British debt to the United States, which has been estimated at some five billion dollars.

The French Shylocks demand from Germany payments that will run up to about four billion dollars, that is, the French debt to the United States, plus its debt to England, plus the indemnity it claims for the devastated war areas. Unfortunately for Germany, incidentally, France still holds over its head the question of evacuating the 2nd and 3rd Rhine zones, to which Briand will not pledge himself definitely unless there is a satisfactory financial settlement.

Similar demands are presented by the other former Allies; the Little Entente even goes so far (under French and Italian coaching, to be sure,) as to demand that Germany pay the entire debt of the former Entente of the Central Empires.

American imperialism, further, has no inclination to see the Allies receiving sufficient funds from Germany to maintain and strengthen their military and naval machinery for probable future use against the U.S.! Especially so, since such funds will necessarily derive from Germany, at the expense of its industrial and financial development, from which the United States expects to receive the payments on the tens of millions of dollars invested in Germany since the inauguration of the Dawes Plan.

There is no doubt that a temporary “solution” – by the typical method of capitalist anarchy – can be found to this problem. But the solution can “work” only at the expense of the German proletariat, already doubly-exploited, already subjected to a most intense rationalization, already driven into a constantly lower condition of life. All signs point to the increased rapidity of the tempo of this development.

American imperialism, already deeply involvd in the maelstrom of world economics and drawn inexorably deeper into the vortex, is seeking to fight its way out at the expense of the European bourgeoisie, chiefly of the German bourgeoisie, who in turn unload their burdens on the German proletariat. The German bourgeoisie, for its part, is preparing the grounds for a more violent pressure upon the working class.

These preparations are reflected on the political field by the movement for a “bloodless putsch” in Germany, for the establishment of a naked dictatorship. The reactionary press in Germany demands ever greater power for the President, Hindenburg, who has, significantly enough, refused to withdraw from the position of honorary chief of the fascist Stahlhelm. The same press is filled with sharp criticisms of “the outworn, fruitless parliamentary system.” It is further significant that Hjalmar Schacht, head of the German State Bank, and chief German negotiator at the Experts’ Conference, is mentioned prominently for the post of German Mussolini. Incidentally, the German social-democracy, nominally at the head of the government, is in reality clearing the road for the reactionary coup, and the repetition of a collaboration with naked reaction to suppress the rebellious proletariat – as was done years ago by Ebert and Severing – is entirely likely.

The bourgeoisie may feel elated at the thought that they are solving this delicate question satisfactorily by uprooting the old Dawes plan in order to plant a new one. But they are blindly sowing dragon’s teeth. Whether the harvest is to be a reactionary dictatorship or a proletarian revolution in Germany will depend chiefly on the strength, preparedness and resolution of the German Bolsheviks.

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