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H. Oehler

Bank Holiday Screens Advance in
the Concentration of Big Capital

(April 1933)

From The Militant, Vol. VI No. 21, 1 April 1933, pp. 1 & 2.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

The “Bankers Holiday” has passed into history and will be recorded as one of the major moves of the financiers in their struggle to bring the antiquated banking structure up to the level of the present day needs of the American imperialists. For years they have been striving to legalize unlimited branch banking. They have been able, only through a bitter struggle and finally, a compromise, to obtain a partial victory in this field. The slow progress has been due to the dogged resistance carried on by the lesser sections of the exploiters who are at present caught in the middle of the struggle between the proletariat and bourgeoisie, and who, in the final analysis, must trail behind one or the other camp.

The speed with which the state moritoria were called and the quick follow-up by the new national administration, with promises and minor concessions to the lesser exploiters, proved to be of sufficient force to line up the majority of the states to drive through the new law and for the power to be given to those in control of the reorganization of the banking structure. The majority of the industrialists and the urban and rural middle class were taken of their feet and fell in line for the “national emergency”.

What Was Aimed At?

Regardless of the fact that the door is now wide open to inflation and indirect wage cuts, the main target aimed at and hit by the imperialists was the reorganization of the banking structure for the purpose of eliminating many more small banks and sectional banking influence over the dominating group; thereby, to organize the machinery so as to enable the bankers to mold a single national banking system out of the present dual system; finally, so as to liquidate the heavy internal debt bearing down upon the American industries.

Such liquidation in this period of attempted capitalist reorganization is called deflation by the capitalists but in no way conflicts, at this stage, with the currency inflation. On the contrary, liquidation of the internal debt proceeds through a two-fold process. On the one hand, bankruptcy, mergers and concentration – liquidation. And on the other hand, at the right moment, and properly “controlled” through a graduated plan – the process of inflation.

Senator Vandenberg, Republican from Michigan, in objecting to the present procedure said: “If the government continues to license banks on the present basis we are embarking upon the most ruthless deflation in the history of this or any other nation ... we are going to needlessly massacre the savings of the American people.” What else is to be expected? That is just what the

Roosevelt administration must do in order to function for the group of imperialists that backed its campaign in the last election. It is a government action to hasten the process of weeding out the small banks. It took the crisis several years to weed out small banks through bankruptcy. The new laws speed up this process The capitalist government “organizes” the anarchy of capitalist production, but it cannot organize capitalism production.

American imperialism must obtain markets, and is doing everything possible on an international scale to obtain them. However, this is only half of the process. At the same time they must reorganize and improve production at home in order to undersell the other capitalists on the world market. the liquidation of the internal debt is a major part of this. And the move the imperialists are making now with the banking structure is the key to this necessary change through a graduated plan of attack upon the lesser exploiters and the working class.

The banking crisis brought another factor to the surface that we have always pointed out. Now the evidence is clearer. We have rejected the theory current in the American Communist movement that the American imperialists were one bloc against the other sections and classes. We know that when it comes to a struggle against the working class or other imperialist nations their unity can be obtained in the fight because the interests of the groups of financiers run parallel. However, we also know that a constant fight between the groups of financiers to gain hegemony of the whole at the expense and elimination of the other sections of the American financiers is a point of elementary understanding to the Marxists, if it is not, to many Stalinists.

To point out to the workers in the election campaign that Hoover and Roosevelt are heads and tails of the same coin is correct, but to stop at this point, as the Stalinists do, is to leave unanswered another important problem. Imperialists support both Hoover and Roosevelt but different groups of American financiers cast their lot with each office boy. It is true that in the main they are united against the industrialist, the middle class and the workers. This is natural. While they have this united front against the other lesser exploiters and the workers, clearly revealed in their program, it is also true that the different groups of financiers have their struggle for domination. And at this point, we find the advantage of one group of financiers’ candidate, Roosevelt, against the other group of financiers’ candidate, Hoover, Roosevelt can talk against the “money interest”, the “Wall Street crowd” and line up the support of the confused workers and the muddle-headed middle class and reformers. That is how the war lords in China “fight’’ imperialism and that is how the capitalist politicians from Roosevelt on down to the socialists fight “Wall Street”.

It looks as though Mitchell is with the “wrong” group of financiers. Now there is a movement on foot to “draft” Pole as Controller. La Salle Street supports Pole against the Wall Street man, Governor Meyer of the Federal Reserve. The truth is that it is not La Salle Street vs. Wall Street. The groups of financiers struggling for domination have their connections all the way down the banking structure.

Working class or capitalist politics must find the key to open the lever that will pull the greatest number of factors for the class interest. The group of imperialists supporting Roosevelt was successful in its first major move along this line. Will it be able to keep it up? At least Hoover may take lessons from Roosevelt. The idea is – that whenever you hand the bankers a billion, or the navy a half billion just hand the worker a glass of beer or any other slop and the misleaders of labor will call it fifty-fifty.

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