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Hugo Oehler

The Class Meaning of the Conflict
over the Roosevelt Monetary Policy

(December 1933)

From The Militant, Vol. VI No. 54, 9 December 1933, p. 2.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

The government money policy in relation to the national recovery act of the present administration has reached a critical stage. A struggle within the camp of the big bourgeoisie over methods to be used against other imperialists, the middle class at home and the workers of the world has been brought to the surface. In the first stage of the NRA this struggle, which was officially inaugurated with the election of Roosevelt, was somewhat concealed. Now it has broken out in the open.

It is no accident that the present controversy rages around a secondary issue such as the monetary policy. It seems to be an excellent point of attack for the opposition capitalists. At the same time it is a convenient cover for the more important struggle. Due to his government position Dr. Sprague was in a key position to launch an attack. His resignation as treasury financial adviser is hailed by the press as a step that will bring into sharp relief the different views on the monetary question. This is true. Nevertheless the question remains a secondary one.

Dr. Sprague’s Statement

Dr. Sprague understands the difficulties of the capitalist system as a whole. More significant on this score than his criticism of the Roosevelt money policy was the following statement by Dr. Sprague:

“Capitalism cannot survive unless we get together, tackle and solve these major problems which are breaking it down, which have already partially broken it down. I should say that, failing solution, the final breakdown will come two years from now.”

Of course this is only half of the story. The other half, which Lenin warned our class about, is that without a revolutionary party a revolutionary policy and revolutionary leadership, there cannot be a successful revolution no matter how difficult the situation of capitalism is.

Drastic Steps To Be Taken

In the money policy of the government, all of the mild methods of inflation have been tried. Now indications are that more drastic steps are to be taken. This is one of the reasons for the present attack of the “sound money” advocates. Some say that Roosevelt is fighting the inflationists with inflation, meaning that he is using mild forms of inflation to head off direct currency inflation. Others do not desire to be kept in the dark as to the government policy and hope that the attack will force the issuance of a statement, indicating more completely the objectives of the present drift in the Roosevelt monetary policy. The European economists, reviewing the steps taken by the United States, inform the dollar defenders that they took the identical steps several years ago.

But underlying and more fundamental than the offensive over the monetary policy of the administration is the struggle of the capitalist group working for greater government and industrial centralization against the capitalist individualists. And also there is the struggle over the question of the financial undertakings and expenses of the government for which at present there are no means of equalizing through government income. Some argue that the middle class will have to bear the burden with increased taxes. Others contend that the issuing of green-backs and currency inflation is the best method. This is not only a conflict between the big capitalists and the middle class. It is a struggle within the camp of the big capitalists themselves as to the best method of consolidating and maintaining their power at home and abroad with the least friction. The struggle against the pound and the franc on the international field is as fundamental as the struggle against the other classes at home. For, in the last analysis, the leading imperialists desire to have the dollar sailing the seven seas as the dominating international exchange when monetary agreement can be reached on a basis satisfactory to America.

Increase In Foreign Trade

The increase in foreign trade for the month of October is reported enthusiastically by the capitalist press which attributes a considerable part of this gain to the depreciation of the dollar in relation to the pound and the franc. Soviet recognition and trade, through credits on American terms, are regarded as a step to increase the exports and regain markets. In addition to this America holds a favorable position in the Pan-American conference.

The tinkering with the financial structure is only a surface scratch of the problems and contradictions confronting American imperialism. At the most such measures can only provide short breathing spells. The more fundamental problems will have to be “tackled and solved” to prevent, a break-down.

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