The two articles we republish appeared in the Fraction newspaper in July 1931. They took their cue from the Hoover proposal to grant Germany a one-year moratorium, given its inability to pay the instalments of the ’reparations’ imposed by the Allies.

Germany had already previously benefited from the ’Dawes Plan’ in 1924, the ’Young Plan’ in 1929, and was now about to enjoy the beneficial effects of the ’Hoover Plan’. All these interventions had enabled: the US to invest millions and millions of dollars in Germany; Germany to rebuild its economic structure and pay ’reparations’ to the victors (especially France); and France and England to pay the instalments on the ’war debts’ they had contracted with the US.

Keynes had written in 1926: ’Reparations and debts between the allies are settled more by paper than in kind. The US lends money to Germany, Germany transfers the equivalent to the allies, the allies turn it back to the US. Nothing actually moves and nobody is a thread worse off than before’.

But Keynes only saw what his bourgeois blinkers allowed him to see, i.e. the outward appearance of a whole financial traffic that, running in a closed circle, could well be considered stationary. What he failed to see (or pretended not to see) were the substance and effects of this ’vicious circle’. First of all, it represented an intervention of solidarity by world imperialism towards German imperialism, threatened by the common enemy: the communist revolution.

The Fraction highlighted well the synchronism between American aid and revolutionary threats: the ’Dawes Plan’ came in the aftermath of the German crisis of 1923, when the revolutionary danger had already been averted; but the same mistake was not repeated later and the new interventions were implemented before the situation precipitated again.

Alongside this action of counter-revolutionary solidarity, however, the interventions of the ‘gilded reaction’ served the United States to pursue a strategy of financial warfare against England and France such as to collapse the latter’s unchallenged hegemony over Europe after the First World War and such as to atrophy, as much as possible, the power of the vast British empire.

The two articles, if we take the intervention of the ‘gilded reaction’ as our starting point, describe, however, the picture of ongoing inter-imperialist struggles, future alliances and, above all, the inevitable outburst of capitalism’s deadly crisis into a new international carnage, given that the proletariat had by now been openly betrayed by its communist parties, by Lenin’s International, and given that the Soviet state had now taken its place, de facto and de jure, in the ’League of Nations’, renouncing its international revolutionary class position.

The fractions of opposition to Stalinism proved to be too weak, theoretically more than materially, to be able to elevate themselves to a secure leadership of the working class. Some sooner, some later, all the various experiences of the World Opposition were swept away and sucked into the whirlpools of Stalinist counter-revolution.

Only the Italian fraction abroad was saved from the tragic shipwreck. It could in no way intervene in the events and the second carnage passed, in the name of the working people, Christianity, democracy and socialism, the proletariat as a class for itself was totally absent, it only served as cannon fodder to be immolated on the altar of Capital. But if continuity has been maintained between the Communist Party Manifesto, the revolutionary opposition to the 1914 war, the Russian revolution, the Third Moscow International and the inevitable World October of tomorrow, this is due to the anonymous comrades abroad who deprived themselves even of bread so that the Party could continue to spread its voice, who produced theoretical works that were often ungrammatical but doctrinally exact, because their hearts burned with faith in communism.

An exact understanding of the new ’Hoover Plan’ is made easier by recalling the most recent international events that found their provisional and unexpected conclusion in the American proposal.

Last May French imperialism was able to register a success with the referral of the Anschlüss threat to the Hague Tribunal and the preliminary declaration that whatever the legal solution, politically the French opposition would remain unchanged. We noted at the time that the essential significance of this Anschlüss lay in the attempt to shape the map of imperialist influences in Europe according to the disposition of economic forces in Central Europe and the Balkans, to shape this map, i.e., the unification of the German industrial basin with the Danubian agricultural basin.

This was the practical response to the German Anschlüss project that French imperialism had managed to avoid. At the same time, Paris became the active centre of all financial initiatives intended for intervention in the Balkans with loans to all the Danube states, all the more possible because the smooth functioning of the enormous German tributes allowed France to rival the USA in the gold base it had been able to accumulate.

In the meantime, the French plan was developing with an attempt to conglomerate Russia itself to which ’the plan of economic non-aggression’ was promised in exchange for Russian recognition of the East German border.

Ultimately, we were witnessing the unfolding of the two basic tendencies of the imperialist struggle in Europe. On the one hand Germany aiming to rebuild the influence it expected from the development of its economic forces, and on the other hand being hindered and defeated by French imperialism which [had] gained control of the most important sectors in Europe. The German failure posed the darkest prospects for that imperialism. That state of chaos and panic which characterises the eve of great class struggles became visible. Massive outflows of capital abroad to such an extent that the Reichsbank’s gold reserve had reached its legal maximum, and even the guarantee of servicing the treasury’s current commitments was lacking.

This was the time when Brüning, on the eve of his departure for the Chequers, published the hunger decrees that gave the go-ahead for the new offensive against wages, deciding to reduce civil servants’ salaries by 4 to 8 per cent, lower unemployment benefits by a further 5 per cent and raise duties and indirect taxes.

A more serious challenge was difficult to conceive for the German workers, and it is well known that the Social Democratic Party, after the opposition’s customary phrases, even renounced the convening of the Reichstag, demanded with a questionable sense of expediency by the communist group, which should have made the attention of the masses focus not on parliamentary disputes, but on the struggles of the masses based on the economic agitation to be carried out towards the goal of defence against fascism and for the communist revolution.

In the meantime, the attitude of French capitalism was as follows: ’let Germany prove to the world that it knows how to face the national-socialist and communist danger on its own, and then it will be possible to speak of a moratorium in the operation of the Young plan’.

Such bitter tension between French and German imperialism, such a serious economic situation in Germany, must have been reminiscent of the situation in 1923 and the occupation of the Ruhr. And it is certain that had the situation of the communist vanguard been different, well other would have been the consequences of the situation that currently revolves around the expedient of the Hoover Plan.

In the midst of the worst crisis known to capitalism in all countries, workers’ unrest was not lacking. Everywhere, in France as in Germany, in England as in Spain, compact groups of proletarians have taken to the streets to destroy the bosses’ plan to massively reduce wages. But everywhere, in all countries, social democracy remained the master of the field and where (the Ruhr strike, the miners’ strike in France) it was not possible for it to agree to its plan of enslavement of the masses, it succeeded in isolating the workers in the struggle in such conditions that, after a few days, there was a discreet and disorderly surrender, while centrism found there the subject of its criminal demagogic exercises.

A situation of such high possibilities for proletarian struggles was to know a situation of such serious disbandment of the communist vanguard, from which centrism had taken away its specific function as the motor centre of the great class struggles.

In 1923 the golden reaction came after the defeat of the revolution in Germany. Now the new Hoover plan came before the serious conditions of the German economy gave rise to the great class struggles that were easily foreseeable, especially in Germany. It is futile to seek a justification for the American proposal by taking into account above all the elements of American imperialism, considered as a unit in itself. Its state budget closes with a two billion deficit, while economic conditions in all countries give no hint of a possible upturn in business capable of diminishing the hyperbolic seven million unemployed.

In this situation, the six billion shortfall in revenue represented by the servicing of war debts ’suspended for a year’ will require new fiscal measures that cannot be presented as a temporary sacrifice. Nor can Hoover’s proposal be understood as solely aimed at defending American capital invested in Germany, which is valued at DM 12 billion in the long term and DM 6 billion in the short term.

Although this is evidently one of the elements that determined Hoover’s proposal, it is not the essential one since it was not impossible either to withdraw the invested capital or to liquidate those companies where it was mobilised and where it is certain that the eventual loss would have been less than that caused by the moratorium.

It is in another field that the cause must be sought. And in the same field were to be found the great difficulties within which the German economy is moving. Namely in the danger of social upheaval, of a communist revolution in Germany that would signal a new precipitation of events worldwide towards the proletarian-communist solution to all the problems caused by the deadly crisis of capitalism, which, after the temporary readjustment of 1923/29, had had its starting point precisely in the supposed Eldorado of capitalism, in the USA.

Therein lies the bottom of the Hoover proposal. It is the most brutal reaction that can still cloak itself in the gold of generosity. It is the desperate rescue from those who feel threatened by an equal end to that which torments the sick. It is a new expedient that proves how vigilant inter-imperialist solidarity is and that occurs when Brüning’s ’starvation decrees’ had already been taken, and which realise the highest exploitation of German workers. Needless to say, even after the American moratorium, the decrees remain in full force.

The Hoover expedient does not change the framework of the deadly crisis of capitalism. Intended to parry the immediate danger of a communist revolution in Germany, it could only have repercussions on the front of the inter-imperialist quarrels from which the other outcome of the situations, namely war, could arise. To this end, an analysis of the proposal’s concrete repercussions in the economic field is necessary, and this is what we will do in a future issue.

In the previous issue we pointed out that a proper understanding of the Hoover plan was only possible by recalling the events that had preceded it, both on the front of the class struggle and on the front of the inter-imperialist struggles. The first front was characterised by the extreme dispersion of workers’ agitations in response to the setbacks of the crisis that the workers suffered in all countries, a dispersion essentially due to the crisis that swept through the communist vanguard and temporarily destroyed its function as a decisive factor in the class struggles. The second front, the inter-imperialist front, characterised by the evolution of the forces of the economy towards a new grouping of states around German imperialism destined to oppose the hegemony of the other grouping coalescing around French imperialism.

The events that preceded and accompanied the conclusion of the Franco-American agreement justify what we said in the previous article.

First of all it is necessary to specify what this Hoover plan consists of. We already said that it could not be justified solely in the field of the defence of American capital invested in Germany. And these last few days have essentially proved it: the mass withdrawal of these capitals has occurred at the same time as the flight of important German capital. In six weeks an approximate figure of 20 billion French francs crossed the German borders and this occurred, for the most part, after the Franco-American agreement which sanctioned the implementation of the Hoover Plan. On another plane was to be found the explanation for this plan and that is on the inclined plane where the multiple and intricate contradictions of the situations moving within the framework of the deadly crisis of capitalism are inexorably destined to fall. At the bottom of this plane, the dilemma is that of war or revolution, and the Hoover plan is but an expedient which would like to hold back the inexorable course of these fundamental tendencies, and which at best will only succeed in delaying - never in avoiding - the explosions of the conflicting forces.

It is pointless to linger on partial analyses detached from this or that conjuncture. It is certain that these analyses are indispensable for solving the tactical problems of proletarian action; but as far as the whole situation in which we still live and in which the very forces of capitalism clash in an infernal catapult is concerned, only a general vision can allow a just orientation. Despite the hosannas of prosperity and rationalisation, the time had come, the period had opened in which the equilibrium on which the transitional situation of post-war imperialism had been modelled in every country - and on a global scale - was crumbling. Crises everywhere: in Germany scourged by the burdens of reparations and war debts, as in America where the uninterrupted flow of these tributes had not only failed to preserve that economy, but had made that very imperialism, in 1929-30, the first to be hit by the crisis. Well, in the presence of an economic catastrophe of unprecedented proportions, due to its internal crisis, the communist vanguard did not even know how to outline, in the face of the development of workers’ agitation, the course of their coordination oriented towards the development of the communist revolution.

Lacking this orientation, the forces of the economy and the internal process of the crisis itself could only provisionally orient themselves towards the other solution of the exacerbation of inter-imperialist conflicts.

The Europe that has been living under the Versailles regime for two years now sees these foundations wobbling. The defeated of Versailles have openly posed the problem of the new map of Europe where the conjunction of the German industrial and Danube agrarian basins are the spectre that breaks the ranks of the ’pacifist’ rosary of French imperialism, which sees the defence of its hegemony as increasingly difficult. This imperialism has had to limit itself to saving the shape of its supremacy in the duel with American imperialism.

The French claim to leave the Young plan intact by mobilising unconditional payments no longer through the channel of the German state, but under its direct control and in the form of French investments in Germany, this claim had to be withdrawn.

The other claim to spare the Balkan and Danube states, which are the specific field of operation of French imperialism, from the consequences of the Hoover moratorium, also had to be withdrawn. Moreover, as far as payments in kind themselves are concerned, Hoover succeeded in imposing on French imperialism that a solution must be found not on the general but only on the circumstantial issues, while the general principle of suspension remains in place. Finally, the last problem of the guarantee fund needs a brief illustration. The operation of the Young plan (in other words, of that plan established in The Hague in 1929 that was supposed to ’liquidate’ the war once and for all, and which today is already in tatters) imposed on France, which obtained five-sixths of the unconditional payments (i.e. not subject to moratorium), the obligation to set up a guarantee fund that would come into operation when Germany availed itself of the right to suspend the conditional payments, in their entirety intended to reimburse America by all the European powers.

Now France wanted to safeguard itself against a possible German moratorium request for next year and thus wanted to exempt itself from the obligation to build up the reserve fund, especially since it had traded - with the Young loan - the same future additional German payments on the unconditional part.

Labour’s Snowden, undoubtedly in the name of ’socialism’, made a point of refusing the intervention of British capitalism in this guarantee fund for the coming year as well. On the other hand, on this ground too, Hoover had the upper hand, and French capitalism had to commit itself to replenishing this guarantee fund to the extent that the German moratorium will take place.

In the dispute between the two imperialisms, the French and the American, it was the latter that finally had the upper hand. And when the so-called agreement was established, the evolution of economic forces within the framework of the maintenance of the capitalist regime was accompanied by the presence of the most favourable conditions for German imperialism, which will serve as a pawn in the manoeuvre of American imperialism against French imperialism.

A different position of forces among imperialisms would certainly have brought to its logical consequences the battle begun with Hoover’s ’generosity’ on the one hand, and Briand’s ’defence of peace’ on the other. If German imperialism were in a position to face war today, we would have gone straight back to 1914. And indeed identical processes had taken place. The ’Union sacrée’ had been re-established everywhere, with the inevitable social-democratic contribution, and it is characteristic that in France, for example, the first word of alarm against the Hoover plan came from the socialist party. Nor was missing the ambassador from German social democracy in Paris. In 1914 it was Müller, in these days Breitscheid, the man from the German union sacrée who met in the French parliament with the man from the French union sacrée, Leon Blum.

But German imperialism is not yet in a strong enough condition to be able to face war, and this fact alone has prevented the contradictions from falling into their natural solution which is war when the other proletarian response, namely the direct struggle for communist revolution, is lacking.

The background of the situation is the presence of an economic crisis of gigantic proportions, with deficits in all the state budgets of the world, with twenty million unemployed, with populations of hundreds of millions starving in the colonies, with the extreme tension of the relations between the imperialisms in struggle, while the de facto conditions for both the revolution (crisis of the communist vanguard) are lacking, and for the war (incomplete preparation of German imperialism), the background of this situation reduces all the showy and impressive plans to expedients, shatters them and puts into increasing evidence the causes of this situation that do not reside in this or that circumstance but invest the whole epoch of the deadly crisis of capitalism.

Social democracy had said of the Hoover Plan that it was ’a breath of peace’, in anticipation of the Disarmament Conference. A breath of peace that immediately agonised in the face of the collapse of the financial apparatus of the very German economy that was supposed to draw sustenance from Hoover’s breath. One of Germany’s four financial trusts collapsed and Luther sought the 25 billion franc bailout to halt the Mark’s flight. American imperialism, which had already given 100 million dollars swallowed up dizzily in the maelstrom of an economy wracked by disruption in the most sensitive apparatus of its functioning, namely banking and finance - due to the lack of de facto conditions of a war - refuses to throw itself headlong into the battle and refuses Germany unlimited credits. And this situation is seized upon by French imperialism, which set as conditions for its intervention the renunciation of the Anschlüss and the construction of the new battleships, returning all problems to the dispute that had preceded Hoover’s gesture and had been interrupted at the French disadvantage with the Franco-American agreement.

In the presence of this situation, nationalist excitement in Germany grows while in vain the irruption of movements of the disbanded proletariat is sought, which is called upon to bear all the costs of the situation that is being perverted.

What is the solution, the immediate way out of the situation? There are only expedients for capitalism. And it is highly probable that every expedient will have the fate of Hoover’s recent one, i.e. it will be reversed a few days after its implementation. The only ultimate solution can be found in the communist revolution. Stalin, in the presence of this situation, has given the word that can most seriously compromise the interests of the Russian and international proletariat. It is by no means without significance that this occurs precisely when the need for the communist orientation of the proletariat is most vivid, most burning. The forces reveal themselves once again at decisive moments.

Faced with the communist organisation turned to ruin by opportunism there remains the problem of the only exit consisting of the victory of the left fractions, which alone can coincide with the victory of the proletariat.