US threatens new imports surcharge

UNLESS there is substantial progress in the next two months to overcome the American trade deficit, President Nixon will imof the County of Sussex. pose a surcharge on imSports.

This Washington announcement I larks a new st age in the rapidly intensifying bankruptcy case.

battle between the States and its main rivals.

It is an ultimatum directed at Europe and Japan, which are currently struggling to avert a second up-valuation of their currencies against the dollar. electrical contractors and widows. Nixon, who is reported to be 'quite disturbed' about the $6,400m American payments deficit, has for some time been planning a major economic blow against the Combe rich. mon Market and Japan. He has done This best to stoke up the crisis on the foreign exchange markets over one after another. the last eight days and force a major currency shake-up.

For the past eight days the German and Japanese governments Maudling felt obliged to leave his job. have been trying unsuccessfully to stem an unending flood of incoming dollars. The Nixon administration has been openly demanding that both countries immediately fix their mansion. currencies at a new, higher, rate against the dollar.

In Tokyo, his envoy, William Eberle, in hour-long talks. with Japanese trade officials, stressed the need for them to curb exports, take Board and British Rail.

in more imports and adjust their currency, according to Japanese sources. Pompidou pulls a red scare has since repaid the money. FRANCE'S Georges Pompidou is preparing Planning Council. a presidential coup-d'etat. If the left coalition wins the March elections, he will dissolve the National Assembly and hold a new election until he gets a government of HIS choice. wrote in gratitude to Poulson).

This warning came in a well-timed descent into the electoral arena in a TV interview on Wednesday. He made nonsense of the Communist Party's professed adherence to the Fifth Republic's Constitution—drawn up in 1958 on instructions from General de Gaulle.

He justifies his plan as forestalling a repetition of the 1968 events which Pompidou called 'a dress rehearsal'.

The ruling class vividly remembers those weeks in May and June when power was in the grasp of the workers and appeared the following interesting item: they are determined to do everything to prevent such events recurring. Pompidou used every argument in the anti-communist armoury to pull in votes for the Gaullists as the defenders of property and order. He claimed that even if the Communist Party was defeated, it would call on the masses to act through street demonstrations and strikes, for the creditors. as in 1968.

He accused the communist-controlled CGT union of being party to a plot intended to bring the Stalinists to power through illegal means and to establish a regime similar to those of eastern Europe.

'Events May, 1968, could always recur, he one thinks, and everyone petrified of further dramatic disclosures. will do well to reflect on this', said this former employee of the Rothschild bank.

Pompidou knows the French Stalinists well and clearly did not believe a word of what he said about a CP takeover.

In fact he counts on Party to hold back working class, just as it in 1936, at the time of FOREIGN CORRESPONDENT election of the Popular Front government, and again in May-Tune 1968.

He deliberately used redscare talk in order to rally support for the Gaullists, especially from the middle class and the peasime he At the same time exposed the CP's position of bending over backwards to fit in with the provisions of the Constitution by showing that it made him the real master of the situation, however many votes the left coalition obtains.

CP secretary Georges Marchais plaintively complained that the President's interview was 'an inadmissable interference' in the campaign.

Georges Seguy of the CGT, likewise protested JOHN SPENCER He drew attention to the recent warning by Nixon's economic adviser Herbert Stein that the US would take unilateral action if international monetary agreement is not forthcoming'.

All attempts at agreement in the past 18 months have proved fruitless and negotiations under the auspices of the International Monetary Fund are not even scheduled to begin for another six months.

Meanwhile, by forcing the central banks in Frankfurt and Tokyo to absorb astronomical sums of unwanted and inconvertible dollars, the US is exporting its own inflation on an unprecedented scale.

The Bundesbank has had to buy some $5,000m as a result of this American pressure, while the Bank of Japan has had to buy on similar scale. For every dollar taken in, the Bundesbank has to set 3.15 marks in circulation, which means that the German money supply has suddenly been swollen by some 15,000 million marks.

Tighter controls over bank lending-aimed at putting some of this money into 'cold storage'-have been denounced as 'a farce' by leading bankers.

The plain fact is that West Germany cannot control the Euro-dollar market, is getting no assistance from its Common Market 'partners' and is being driven willy-nilly towards up-valuation of the mark.

But even this will not satisfy the United States capitalists. Both the mark and the yen underwent substantial revaluation under the terms that he had acted not as a President of the Republic (I) but as 'the leader of a political coalition in trouble'.

What did the Stalinists think that a President elected as the anointed heir of General de Gaulle would do?

Under the Constitution, he is obliged to ensure the continuity of the bourgeois state in the Bonpartist form given it by the 1958 Constitution.

Pompidou understands the Marxist theory of the state better than Marchais pretence at being an im and Seguy and makes partial arbiter standing above classes.

Marchais is unable to reply to Pompidou because has always expressed willingness to take office under his presidency and observe the Constitution's conditions.

The President has, at a stroke, exposed the bankrupt CP policy of peaceful, at a stroke of the Smithsonian agreement months ago. Not only was agreement flouted by a number of countries, including Britain, but it failed completely to improve the US balance of payments, which is still getting deeper in deficit.

So Nixon's threat to impose a surcharge is deadly serious. Administration officials blandly indicate that there is no real cause for concern as the surcharge will probably be applied only to creditor countries, notably Germany and Japan. This will bring no joy at all to other countries which are in deficit with the United States, or like Britain, have neither a large surplus nor a large deficit.

They are well aware that even if such a surcharge were directed only against Japanese goods it would adversely affect the, rest of the world by forcing Japanese exporters to sell their goods elsewhere.

A chain reaction of trade restrictions by other countries is guaranteed once Nixon's threat is put into practice.

He has already shown himself willing to use the weapon of tariffs. On August 15, 1971, a general import surcharge of 10 per cent was imposed to force an up-valuation of currencies against the dollar.

Today the deterioration of relations between the capitalist powers is far more advanced, the stock markets of the world are far shakier and national economies have been more deeply undermined by inflaThis time it will mean the export of unemployment to Europe on a vast scale, which will lead to the tightening of protectionism around the world and drive the Common Market ruling class to attack European workers even more intensely than at present.

parliamentary roads to power by stating quite plainly that such a road is closed in any case.

The Constitution enables him to call on the army and the police to maintain the security of the state.

However much the Stalinists are prepared to prostrate themselves and offer guarantees of good behaviour, the French bourgeoisie has no intention of entrusting them with even the semblance of power in the shape of governmental portfolios.

Their reaction to the possibility of a left coalition victory has important lessons for Britain where the ruling class, increasingly obliged to resort to Bonapartist methods of rule, will fight tooth-and-nail to keep the Labour reformists from winning the next election.

Pompidou's statements were shot through with contradictions as he made his appeal as wide as possible.

While accusing the CP of wishing to establish a dictatorship, he also claimed that under the left union programme, there would be a return to the Fourth Republic in which the powers of the President were greatly limited.

With the election campaign only just beginning, further interventions by the President are probable, combined with the whipping up of some kind of 'red scare' , to stampede voters into the Gaullist fold at the last moment.