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Present Econo Memorandum to the E. C. Cc. I Adopted by the Central Executive Committee of the Workers . Party, March 16, 1924. Submitted by Fos- ter, Cannon and Bittleman. of * * The Economic Situation NDUSTRY—tThe industrial system of America, alone among the cap- italist. nations of the world, stil shows great strength. The year 1923 was a peak year in production, in-spite of the drastic curtailment of exports as compared with other boom years, This. unprecedented ex- pansion was, however, due largely to tremendous capital expenditures, {constructive, building, replacements gnd° extensions of* plant and equip- ment), which have already reached close to the limitations imposed by production for profits. The con- tinuous decline since May, 1923, now interrupted by a slight counter-ten- dency, altho it still leaves produc- tion on a fairly high level, shows “that the limits of the domestic mar- ket have been reached. The enormous capital expendi- tures, by increase of plant and equip- ment, have still further increased the potential productive forees of Ameri- can industry, but no new markets are available to absorb that production. The pressure of the accumulating eapital, intensified by the influx of gold into America, is already presag- ing a crisis in industry, and at the same time is bring about tremendous internal changes. Concentration of capital is pro- leeeding at an unexampled rate; new industries, infants of a few years ago like oil and automobiles, are becom-/|h ing giants; great indystrial trusts that completely overshadow anything seen before are coming into being; the economic basis is being complet- ed for the most powerful imperial- ism the world has seen. The present depression is undoubt- edly leading to a crisis, in which cap- italism will repeat the historie cycle described by Marx. This develop- ing crisis is bringing with it the in- evitable pressure upon the working class, in the shape of wage reduc- tions, wars against the unions, lengthening of hours, and loss of previous gains in working conditions. At the same time it makes more dif- — any effective economic strug- gle. The weakness of the labor unions is accentuated by the complete bank- ruptey of the official leadership, which is going over bodily to 7m open policy of collaboration of classes, Wins the O man can be president of the United States unless the political instruments and tools of big great capitalist interests GIVE HIM THE MONEY in the “@Pital. 1 {and middle class. * Biggest Campaign Fund abanYoning all pretense of i struggle. at the same time pressing upon the middle bourgeoisie smaller industrialists, independent class |longer fits the economic facts, begins . The approaching crisis is|to destroy the individual ownership | of which it was supposed to be the especially’ the | basis. Capitalism, blindly following its producers, small retailers, profession-| own laws and appropriating the prod- als and intellectuals, and furnishes the economic basis for the growing ucts of agriculture, has changed the fundamental basis of the system of political revolt of the city workers|agriculture by taking the ownership AGRICULTURE+The crisis in agriculture is much farther advanced and more ‘acute than in industry. Development of agricultural tech- nique has long been demanding more capital than was possessed by the tillers of the lajd, under the prevail- ing mode of individual production. Trust-farming, to ‘correspond with the development of industry under similar conditions, was unable to de- velop on a large scale, It was nec- of the*land from its tillers, but it has failed to substitute the social and productive forms necessary to adjust the individual. productive forces ‘to the centralized financial control and ownership, ‘The result is the, present major dislocation, the wholesale exodus from the land of the bankrupt farmers from their flourishing industry. The entire agri- cultural system has been brought ito a fundamental crisis by the opera- tions of capitalism. This crisis has shaken the conservative and individu- essary to find a method which, while|alistie American farmers out of their retaining the form of individual own- ership, allowed an actual concentra- tion in the hands of the money in- terests. This was achieved in ela- borate and comprehensive extension of the mortgage system, and along with it, tenantry. Agriculture, con- sidered only on its productive side, flourished and grew for a time, But the farmer, gradually but ; surely, began to find himself in the ‘financial position, not of the inde- |pendent producer, but of the depen- ‘dent worker or worse. In a flour- ishing industry he found himself un- able to pay his bills. Just as the coal miners are starving in one of the wealthiest industries of the country, 'so the farmers who produce the food are finding themselves actually going ungry. The ownership of the land, and with it the produce of the land, has actually passed out of their hands. Today a bare third of agri- culture is carried on by those who ig clear ownership of the land they Accompanying this has gone a con- comitant development of increasing taxes that further pressed upon the bankrupt farmer. The expansion of the war period, with its price-fixing of wheat and indirect subsidies to agriculture, gave a temporary relief, but at the same time immeasurably stimulated the process which is the fundamental trouble of the working farmers. This was realized in life when the deflation began in 1920. With the barrier of war conditions removed, the full force of the accu- mulating changes in the fundamen- ‘tal basis of agricultural ownership was felt. The prevailing system of indivifual production, because it no White House form of a campaign fund with which to run. Since 1860, with one ‘exception, the man who had the biggest campaign fund has been elected president. The one exception was Wilson’s second election in which (unless the money was secretly given and handled) the millionaires (in- cluding Mr. Doheny) put up only $1,400,229 to elect Wilson, $2,012,535 to Charles E. Hughes’ campaign. The presidents of the Uni ted States from 1860 to 1920 with their campaign funds are: 1860—Lincoln, $100,000—elected. Douglas, $50,000. Breckenridge,—. 1864—Linco!n, $125,000—elected. McClellan, $50,000. - 1868—Grant, $150,000—elected. Seymour, $75,000. 1872—Grant, $250,000—elected. Greeley, $50,000. 1876—Hayes, $950,000—elected. Tilden, $900,000. 1880—Garfield, $1,100,000—elected. Hancock, $355,000. 1884—Cleveland, $1,400,000—elected. Blaine, $1,300,000. 1888—Harrison, $1,350,000—elected. Cleveland, $855,000. 1892—Cleveland, $2,350,000—elected. Harrison, $1,850,000. 1896—McKinley, $16,500,000—elected. Bryan, $675,000. 1900—McKinley, 1 $9,500,000—elected. Bryan, $425,000. $3,500,000—elected. Parker, $1,250,000. 904—Roosevelt, 1908—Taft, $1,700,000—elected. Bryan, $750,000. 1912—Wiison, $850,000—elected. Taft, $750,000. Roosevelt, $325,000. 1916—Hughes, $2,012,535. Wilson, $1,400,229—elected. 1920*—Harding ( ed), $2,741,503. Cox (admitted), $1,170,321. * These figures appear officially, but it is arg! several millions were ra' Thompson having raised 000 on Sinclair oil stock for the ‘or el understood that lionel Wm. Boyce ection and spent; Co of Harding and Coolidge, as one item ne _|ifact has already had the effect of : while other millionaires (including Harry Sinclair) gave|trial and agricultural crisis and by old political channels and is forcing them in alliance with the city work- ers and middle classes, into indepen- dent political action. : * s ¢ The Political Situation... The mass revolt against..the two old parties— The present ~ political situation“is characterized by aj@row- ing revolt of the workers, farmers, and lower middle classes against the leadership and domination of the two old parties. The Democrat and Re- publican Parties do not represent the interests of the masses that have been supporting them. Neither the workers nor the exploited farmers, and not even the lower middle class- es find their interests. represented and defended by the two old ies, Both are dominated by the big finance and industrial capitalists of the coun- try who are using interchangeably the machinery of the two old parties to suppress and exploit all the other groups and classes in American So- ciety. Because the old parties are being dominated and controlled by big cap- ital these parties have proven them- selves to be totally incapable to cope with the present situation and to satisfy even partially the needs of the exploited masses of the cities and farms. The present industrial and agricultural crisis is accentuating this fact and is giving more impetus and force to the already strong movement of revolt against the old parties,—a movement which is as- suming daily ever wider and bigger proportions. . The disclosures in the Teapot Dome Oil Scandal and in the Vet- erans’ Bureau Investigations have badly shattered the contidence of the masses in the two old parties. This increasing the disgust with and in- tensifying the opposition to the politi- _eal leadership of the Democrats and ‘Republicans, The outcome of it is a veritable mass revolt against these The political expression of revolt against old parties.—This revolt finds its expression in a large mass move- ment tending to split away from the two old parties and towards a new party. The workers, exploited far- mers and large sections of the petty bourgeoisie, spurred on by the mdus- the disclosures of the present sen- atorial investigations, are moving very speedily in the direction of a third party. Insofar as this third party movement has as yet crystal- lized, its organized expression is the so-called La Follette group in Con- gress, the Conference for Progres- sive Political Action, and a number of smaller political groups and state organizations. | As this mass revolt against the old parties develops there is to be seen a clearly defined tendency of the more politically conscious workers ‘and exploited farmers to differenti- ate themselves fromthe amorphous mass and. to organize into a class farmer-labor y distinct and sep- arate from the general third movement. The principal organize expression of this movement is the group of farmer-labor parties which is calling the convention of June 17th and of Federated | Farmer-Labor Party and the Workers Party are a part. All the elements pooner ng | in the general revolt are present in both the third party and labor party move- ments. e thing that differentiates them is the preponderance of petty bourgeois elements, their leadership EN RUSSIAN NEWS IN THE MAK By EVELYN BEIDELL The scene is a hotel room in Berlin—or Riga. une, The New York Globe, and ot! papers, the Chicago T. mic and Political Six > OO SD OGRE 0-2 Otome age 0 | “ An scattered about.. The roonr has a solitary occupant, a man wi in thought, sitting before a typewriter. He frowns as perhaps “because futility. at the recollection of something unples Nervously, he picks up 9° typewritten papers, and glances thru them. They are ne dispatches, various} oi : Foils Attack Upon “Trotzky Slaps Red Chief” otzky”, “Revolt Impending In Russia He stops atone sheet and gazes at it ruminatingly, | to have provoked a train of thought. Suddenly his expres comes intense, absorbed. Deep wrinkles are registered vu brow. - They indicate that a profound process of conception on within. Presently, he places his fingers upon the keys, tion seems about to take place! It begins with a clatter of 1 A headline in capitals spread itself upon the paper: “T} SENDS THREAT TO PETROGRAD.”—A . slight pause, details envisaged and correlated, the inspired corresponden on, Armies, generals, cities, Communists and Communist are deftly inserted by the -flying keys. Even a quotatic Trotzky’s “belligerent message” makes its appearance. In a few minutes, the article assumes the earm tions of a regular news dispatch. a fully authenticated and first hand version of “ Russia”. And as such, it will be papers in America. and ideology in the third party movement; as against the preponder- ance of workers and exploited farm-. ers, their leadership and ideology, in the farmer-labor movement. | Forces Making for Third Party.— The forces moving with various de- grees of political consciousness and determination inthe direction of a, ‘third party are “dominated by the} petty bourgeoisie. Altho this move- ment includes large sections of organized workers and exploited far-. mers, yet-its political expression and leadership is centered in a group of petty bourgeois liberal Senators and Congressmen known as the La Fol-; lette group, which really represents : the interests of well-to-do farmers and small manufacturers and other middle class elements. ‘This group in Congress is looked upon by mil- lions of workers and farmers as their. leaders against the domination and oppression of big capital. And it is this fact that makes the political; strategy of the La Follette group one of the determining factors making for the formation of a third party in . the coming Presidential Elections. | The strategy of the La Follette. group has been to gain the leader- ship of the revolting masses r- ably under the banner of the Re- publican Party. If they fail to con- trol tte Republican Convention they will very probably split and try to unite the entire mass revolt against the two old parties into a third party under their leadership. On account of the great and rapidly growing dis- content now existing in the ranks of both old parties this split may be of such a far-reaching nature that a sec- tion of the capitalists will go along with it in order to control it. in such an event the new party would approach the old parties in character. The Conference for Progressive Political Action is another political force moving in the direction of a third party. Altho it is based on and maintained by the railroad unions its political ideology is very much the same as that) of the La Follette group. The leaders of the sixteen standard railroad unions who are also founders and leaders of the Conference for Progressive Political Action, were committed up till the Feb. 12th Conference in St. Louis, to the nomination and support of Mc- Adoo on the Democratic ticket, But because McAdoo was involv- ed in the Teapot Dome oil scandal, they did not dare to nominate him at St. Louis, but contented them- selves with vague third party propa- ganda and the calling, of the July ith Conference in Cleveland. A few days later, however, these same lead- ets of the Conference for sive Political Action partici in the McAdoo Conference-held in Chi- chances of McAdoo Democratic nomination have dwindl- ed down to zero and this has drawn the C. P. P. A. more deeply into the current of the third led and directed by the La Follette But be depende ary labor Paty. Since that tifme, however, the receiving But it can safel on that the party movement jeg from the ca To all purposes published fn the x ers controlling the C. P not support a third part unless they are driven 1 pressure of the masses, ¢ quite likely to betray the ment by endorsing one of the old capitalist par tial candidates in the « tion Forces. Making for a F Party.—The forces mak formation of a class pai ers and exploited farm marily the left-wing o unions and the politics sections of the exploit These forces have crys a number of city and s labor parties, most of w lowing the lead of the Farmer-Labor Party an ers’ Party. The nation this movement is the committee in charge of ‘tion of June 17th, in | In this combination of ing for the formation of mer-labor party, the VW ty, and the Federated F Party are the most conse termined factors. A |} of this combination, alti iy in favor of a strongly influencedigb of the La Follette therefore, one of the mc and urgent problems of the farmer-labor forces course of action which, ing contact with the bro can and Democratic are dominated and capital is creating change in American not solve any of the the development gle and must be" Workers Party for sons, 1. It represents a ers, farmers and lo owning class agai domination of the breaks the capitalist ens their leadership wor! farmers an and professional ele’ hith follo su ‘ul unite: more ‘paganda for a of these w: