: LABOR FRONT

By WILLIAM KASHTAN

The “emergency” measures being in-
stituted by the Diefenbaker government to
meet the “run on the dollar” are likely to’
play havoc with the living standards and
jobs of substantial sections of the working
class. :

The six percent interest rate now set
by the Bank of Canada is likely to restrict
the Canadian economy, not expand it, and
as a consequence unemployment is bound
to rise again and perhaps take on massive
proportions.

The additional duties now imposed, which ostensibly are
aimed at stimulating production of goods in Canada, is more
likely to raise prices all down the line and undermine the
living standards of the Canadian people.

The devaluation of the dollar combined with these sur-
taxes has in effect wiped out whatever gains workers were
able to achieve in recent negotiations. What it will do is.
lower wages by about 10 percent without affecting the profits
of the big corporations. :

To sweeten the pill the government has suggested that
these measures will lead to the development of industry in
Canada but this cannot be taken too seriously when, in the
same breath, Diefenbaker speaks of these measures as being
temporary and implying that in six months time they will be
lifted. If that is so, how seriously can one take the argument
that it will stimulate production and industry in Canada?

This is closely related to the conditions under which the
one billion dollar credit with the International Monetary
Fund and other financial agencies was carried through. Noth-

ing much is said on that score but what were these conditions?
* * *

In Great Britain the price for similar credit arrangements
was the promise of the Macmillan government that it would
impose a “wage pause”. As is known, the government has
been trying to impose it on the British working class, although
not with too much success because the workers and the trade
union movement are resisting it.

In Brazil, the government rejected the credits from the
International Monetary Fund because part of the conditions
was the impcsition of an austerity and devaluation program
which would have seriously undermined living standards.
The powerful movements of the Brazilian working class and.
other sections of the population compelled the government to
‘reject these conditions. ee
* * * ; \

Implicit in these credit arrangements is the loss of:
sovereignty and freedom of movement on the part of the
government. As the British newspaper, the Guardian, de-
clared: “Mr. Diefenbaker’s government had no choice but to
accept the stiff terms set by the world’s bankers as the price
of international support for the Canadian dollar.”

Part of these stiff terms has been indicated in the state-
ment of the prime minister when he said:

“The present situation presents not only a challenge but
an opportunity to Canadians. There must be a concerted
effort to set our economic hotise in order, to hold the wage-
price line as firmly as possible, to cut back costs and to become
more competitive in the world’s markets.” This, comments
the Globe and Mail editorially, is “in the right direction’.

We have still to hear what paring the government intends
to carry through to lop off $400,000,000 from the budget and
cut down the deficit. One simple and useful way would be
to cut down the arms program by at least 50 percent. It is the
arms program, more than anything else, which has distorted
the economy, raised taxes, undermined living standards and,
far from creating employment, has done the exact opposite.

* * *

Bearing in mind the negative and dangerous features of
this austerity and belt-tightening program which will affect
the majority of Canadians, it is hard to understand why T. C.
Douglas, leader of the New Democratic Party, has approved
the measures undertaken by theDiefenbaker government. It is
all the more difficult to understand in view of the fact that
the “run on the dollar’ mirrors a much deeper malaise in the
economy than the government cares to admit; while the meas-
ures it has taken are not calculated to affect the profits or
fortune of the big U.S.-Canadian corporations. On the con-
trary, the credit arrangements and other measures are di-
ected at peserving and safeguarding these corporate interests
while the Canadian people are expected to pay through the
nose in reduced standards and rising unemployment.

The entire labor movement and more particularly, the
trade union movement, needs to study these measures and
their effects, then advance proposals to meet them.

Science plea to JFK

More than 700 American
scientists cabled a last-min-
ute’ plea to President Ken-
nedy on the eve of the sec-
ond unsuccessful nuclear

not had adequate opportun-
ity to try to predict what the
short or long-term effects
will be.”

Kennedy gave no _ indica-,
tion he would call off further

high-altitude test from John-
ston Island, to call off such
tests.

They warned of the “pos-
sibilities’ of hazard for man-
kind and his environment,”
and added:

“Qualified scientists in
this and other countries have

- 945 5m is fay

tests:

The death rate of children
in the one to four year age
bracket is 25 times higher
in South Africa than in
Europe.

for the market

Since the drastic plunge of
the New York stock market
in the last few days of May—
a plunge which has reverber-
ated throughout the capitalist
world—the stock market has
been most unstable and con-
tinues to fluctuate violently.

Gus Hall, a leading spokes-
man of the Communist Party
of the U.S.A., recently offer-

ed an analysis of the reasons

for this erratic behavior in
the New York Worker.
Below we offer some ex-
cerpts from his analysis.
e
By GUS HALL
What are the basic factors

that caused the stock market’

crash?

First, the stock market in
part was influenced by cycli-
cal or periodic developments
because, while it is true that
the economy is on the up-
swing, in this phase of the
cycle there are some very de-
finite weak spots. The pick
up of production so far has
been slow and the economy
remains sluggish.

But this by itself would not
have resulted in the stock
market shock. The develop-
ment in the stock market re-
flected much more serious
and. long-range developing
problems.

In the springtime the ice on
a river or. a lake thaws and
becomes weaker from the
bottom of the ice. Very often
the top of the ice looks as it
,has looked all winter.

What the stock market
crash symbolized about our
economy was the slow unseen
weakening and thinning of
the ice that has been going on
for some time. Without any
forewarning, one foot crashed
through the ice. The next day
it was brought back on to the
ice. But this does not change
the basic fact that the ice is
thin.

The weakening of the ec-
onomic ice is not just a cycli-
cal process. What we are wit-
nessing here is a phenomenon
of a number of basic; proces-
ses—slow qantitative changes
that have been going on for
some time are now reaching
a point where they cannot
continue without resulting in
qualitative changes.

In fact the stock market

-was a flare that signalized

5 ee

L'Humanite (Paris)

“cold war policies that have’

been in effect since 1946 have |
reached a point where, if con-
tinued, can result in very
serious weaknesses for our
people and nation.

These policies have hoisted
a $50 billion yearly war-bud-
get on the backs of the people

of our nation.
The continuing drain on

the gold reserves, resulting
from the cold war balance of
trade deficit is reaching a
critical point.

The cold war policy of con-
stant expansion of industrial
capacity without any. real re-
lationship to the market has
now become a dead end
street.

The production of modern
war: equipment takes more of
the tax dollar but it goes into
the coffers of an ever smaller
group of monopolies and does
not have the same force as an
economic artificial stimulator.

END OF CYCLE

In fact the post war build-
up in the capitalistic world
has now reached the end of
its boom cycle. The illusion
of continuous expansion has
now met the reality of the
laws of capitalist society. The
shock of this realization hit
the stock market around the
world.

For millions of Americans
who invested in a few shares,
their deep-seated illusions
about the basic nature of
capitalism melted with their

. Meagre savings.

For the rich, on the other

“ hand, it was the biggest steal

in history. Once they realized
the situation, the monopoly
interests put on the pressure
by demanding full payment
on stock bought on a marginal
basis.

This further deteriorated
the price of stocks. It was
only then that they moved in
for the kill.

As is always the case un-
der capitalism, the biggest

that the continuation of the

and the richest, who in the

BRITISH PROTEST GERMAN BASES. Last week saw the
British people in mass protests against British bases for
German troops, including Panzers. Photo shows some of the

in the demonstrations.

members of the National Union of Mineworkers taking part

July 6, 1962—PACIFIC. TRIBUNE—?

2OO0000000000000000608 What ar e the reason ;

first place are responsibl
the deterioration, then
advantage of this situ
and grab additional fortu
The basic cause of
crash flows from the fune
mental laws of capitall
‘But this has been further ¢
gravated by the cold
policies. Because the *
nedy administration has
tinued to follow these P®
cies, it must bear a good P
of the responsibility.
RIGHT DANGER
However, there is a ¥
real danger that the Repu”
cans and the ultra-Right #
cist elements who are a M
driving force for the vast
war expenditures will use"
confusion and the disillus®
ment for their own evil 4

The ~world must nevel *
get how big business of
many, through the instrum
of its created fascist elem
used the disillusioned mas?
especially the middle cla
for its brutal purposes.

In this connection, it 15”
teresting to read what J
Reston of the New
Times says:

“The mail coming into ®
office since the steel PP 5
controversy is:not only
cal of the president, but mY
of it is ugly, personal ane
rational. ch

“Since the drop in the st
market the thing has 0
worse. The president is a
tured as an impulsive. ES
winger with dictatorial i
dencies, surrounded by # id
of goofy professors —- i
anybody who suggests Fie
print that this is bunk is Y
fied as a bootlicker, or W%
who has sold out for 2?
vitation to the White Hou

There is no doubt that
John Birchers and similat! .,
cist elements are steppin&
their frenzied activities.

The stock market plunge,
not an incident wthout its ~
fects. What happened of © ie
Street will have its econo”
ag well as political afterm®,
All of the negative econ?
processes will increase
tendencies to further °
overseas investments.

The reactionary , forces
the country will use the ©
to call for a cut in expe? fe
tures on social security. gee
will be calls for cuts in W2?
There will be calls for ie
arms production. the

But on the other hand ©
sobering effects and the
realization as to the true
nature of capitalism jot
bring new forces into act
The experience of the “y
will further stimulate
people’s movements.

The choice . before
ministration and the
is:

pasi?

=)
—

the #

Continue and acceleraté he
mament production 4° 45
arms race, as the monoP™ 4),
demand, and add to thelt
ready swollen coffers, eas?
sify the cold war and inet
the instability of our econ?
—a road to ruin an
Raise the expenditures 5
public and social needs og
the well being of our ® and
sharply cut armaments son
lessen internatioal te? om
curb the power of thé fi
opolists and establish 8° a?
economic security—@ 7? ao
an improved economy
peace? ee
There is no other choi

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