Carlos Hudson Archive | Trotskyist Writers Index | ETOL Main Page
From Labor Action, Vol. 10 No. 38, 23 September 1946, p. 6.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Approximately $15,000,000,000 worth of optimism in the future of capitalism has been knocked out of the American gamblers on the Stock Exchange since May. This is the amount which a declining market has clipped from the value of stocks listed on the Exchange.
On September 3 the stock market suffered its worst break for a single day since June 1930 eliminating all the gains since V-J Day.
Stock markets the world over trembled at the tremendous selling rush in Wall Street recently. Prices on the London exchange broke sharply. Selling waves swept the Paris Bourse on all issues, both foreign and domestic. The slump in Wall Street caused “local nervousness” in Johannesburg, with diamond, copper and Free State issues all marked down appreciably.
Sellers of luxury goods and black market operators in this country were gloomy. Commodity prices began to dip, and the asking price for real estate in many cities bumped downward for the first time in years.
The very thought of another “1929” haunts the world’s wealthy. That is not yet in the cards – not yet.
Wall Street and its U.S. State Department are desperately and boldly pouring wealth into Europe, hoping to shore up a sagging system that is crushing European’s millions. In this very process, the artificial market abroad for goods from this country creates a feverish boom in the United States.
American Big Business taunts the shallow economist, Secretary of Commerce Henry Wallace, that it has already provided more than the 60,000,000 post-war jobs demanded by Wallace. But it is premature in its boasts. The test of capitalism, its ability to provide jobs for those who want to work, will come when the stream of goods going abroad begins to slacken.
Unemployment in the United States today stands around 2,200,000, compared with a March 1946 peak of 2,700,000. The Social Security Administration reports the federal unemployment fund stood at $6,700,000,000 in July. Another deep depression, producing an estimated 20,000,000 unemployed, would wipe out the fund in short order.
Much of today’s unemployment stems from the fact that many factories refuse to hire new men over 45 years old, or. women over 35. Over 53 per cent of the men and 55 per cent of the women drawing unemployment compensation in Illinois are above 45 and 55 years of age, respectively, reports a Chicago administrator.
Trans-Arabian Pipeline Co’s plans for a pipeline from Saudi Arabia to the Mediterranean will have the full support of the Saudi Arabian government, that government’s finance minister has announced. Trans-Arabian is jointly owned by Standard Oil of California and the Texas Co. The pipeline has secured rights through Lebanon, Trans-Jordan and Palestine, and is now negotiating with Syria. In return, Saudi Arabia has been granted a ten-year $10,000,000 credit agreement with the Export-Import Bank. Of course this transaction influences the position of Washington on the demand of the Jews for free immigration to Palestine ... A delegation from the All-India Manufacturers’ Association is now in the United. States seeking to buy industrial equipment ... A Turkish trade mission has just placed large orders for cotton textile machinery with American manufacturers. Turkey aims to expand its textile capacity by 60 per cent by 1951. “Turkey’s doors are and will continue to be open to American businessmen,” said Frazil Turga, head of the trade mission. It is natural that Wall Street should support Turkey in its refusal of Russia’s demands on the Dardanelles.
Through the aid of Washington, which is insisting on special clauses in foreign loan agreements, the film industry is driving to recapture its market abroad and to carry its own distorted version of the American Way of Life to new markets. Before the war, approximately one-third of total film rental revenues was derived by the average Hollywood company from foreign business with the United Kingdom, Australia, Canada, Brazil, Argentina, Sweden and France. Expansion is particularly aimed at undeveloped markets in Asia, Africa, and Central and South America.
Hollywood’s blatant jingoism during the war paid off. Twentieth Century Fox's gross operating revenues rose from $46,500,000 in 1941 to $178,200,000 in 1945. Net earnings this year will hit $24,000,000, or approximately $9 a common share. The company is now negotiating an alliance with Italian movie interests. RKO this year redeemed all of its preferred stock and has retired all its previously existing funded debt. The company’s 1946 second quarter earnings almost tripled those of the corresponding period last year. Warner Bros. reports a net of $14,792,202 for the nine months ended June 1, representing more than a 100 per cent rise over the same period last year. The per share earnings of Loew’s, Inc., which last year were $2.61, are expected to hit $3.50 this year. Paramount Pictures, Inc., and all of its world-wide subsidiaries are now entirely free of mortgages or funded indebtedness. Elimination of the excess profits tax almost tripled net in the first quarter of this year.
The official fur auctions for the account of the Russian government, which before the war were held in Leningrad, will henceforth be held three times a year in London, as a result of a recent agreement signed between the Russian government and a firm of British fur auctioneers. The Hudsons’ Bay Co. fur auctions are also returning to London, from New York, a further step to rehabilitate London as a world fur center.
Now that the British, with the backing of Washington, have set the Greek king back on the throne and thus saved the eastern Mediterranean for western imperialism, let us take a look at Greece’s economy. Greece is heavily dependent upon imports for survival: – for food, the bulk of raw materials and machinery. Before the war, Greece paid for her surplus of imports out of shipping and tourist receipts and emigrant remittances. The Greeks have lost three-quarters of their pre-war merchant fleet; a revival of the tourist traffic is not likely for several years; and emigrant remittances last year were less than half the 1939 total. To top off the sorry picture, Greece has lost her major markets in Germany and other central European countries, and Russian satellites in the Balkans are not likely to provide a substitute.
Japanese industry is in such desperate straits under American occupation, according to the Wall Street Journal, that the American Military Government general headquarters is seriously considering the nationalization of Japan’s coal industry in an effort to boost production.
“All our problems trace back to coal,” stated one military planner. “Thirty per cent of train operations have been suspended for lack of coal. Steel output is under 20 per cent and manufacturing in general is below 50 per cent of the bare existence level requirements .... The Japanese are not mining; they are trying to find food and a place to live, and restlessly organizing and quarreling with management. Food distribution is progressively deteriorating; miners have not been receiving the rice promised them.”
The output per miner per shift is said to be half the pre-war output.
Earnings of the Big Four rubber companies in the first six months of the current fiscal year were 112 per cent, ahead of the like six months in 1945. Goodrich reported $8.74 a common share this year against $3.52 in 1945. Goodyear earned $6.59 against $2.90; Firestone, $6.09 compared with $3.08; and U.S. Rubber $4.15 against $2.57. It is estimated that the rubber companies should be able to do at least as well in the second half as they did in the first.
Brazil, in a move calculated to combat the severe economic crisis and the acute shortage of most consumer products, has slapped an export embargo on a long list of commodities – grain, cereals, flour, potatoes, cottonseed, cotton textiles, tires, shoes, live stock, meat and meat by-products, hides, leather, timber and vegetable oil.
Carlos Hudson Archive | Trotskyist Writers’ Index | ETOL Main Page
Last updated: 3 April 2020