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From Socialist Appeal, Vol. 4 No. 37, 14 September 1940, p. 3.
Transcribed & marked up by Einde O’Callaghan for ETOL.
A confidential government report now secretly circulating among top notch officials in the Roosevelt government, states that the profits of the capitalists thriving on war orders for the first half of this year are 50% higher than the comparable period of 1939 and is approaching the peak reached in 1929.
This information comes from an authoritative Washington dispatch to the Journal of Commerce, a Wall Street daily, in its July 15 issue. When one remembers that the year 1929 marks the period when capitalist profits reached their highest peace time peak in American history, we get a fair idea of what an orgy of profiteering the bankers, industrialists and munition makers are already having at the expense of the toiling masses of America.
The report also reveals that production in the light goods industries is about the same as 1939. This is a most revealing bit of information, since production in the light goods industries reflects the purchasing power of the people. For instance, the government report indicates that the same amount of textiles, shoes, and automobiles (for consumer purposes) were produced this year as last year.
This simply means that the masses of people have not earned more this year than last and consequently have not been able to buy more this year than they did last year. This is borne out by the fact that the index of retail sales for the first six months of this year is only 8% above that of last year, which was a low year, and already the buying by wholesale distributors of consumer goods has dropped about 35% below the buying of last fall, which indicates that they, the wholesalers, do not expect a rise in the purchasing power of the masses.
All of this merely proves that the so-called National Defense Program, which the people are asked to believe is a patriotic enterprise in the interest of all classes of society, is merely a means for pumping millions into the pockets of the bosses while the rest of the country remains in the same poverty stricken condition it was in before.
A graphic example of how the big bosses manage to clean up millions of dollars on war orders was furnished by the War Department when it awarded a contract to the Chrysler Corporation for the mass production of tanks. Here is a case where the government – or rather the people, in the long run – will give the Chrysler motor magnates $53,500,000 for tanks. But in return Chrysler will only give $33,500,000 worth of tanks. The other twenty million will go for plant and equipment. That is, the Chrysler bosses will obtain the location of the plant, build and equip it, and then transfer the title of the plant to the government. So the government will be the landlord of the plant and the Chrysler Corporation the tenant.
How much rent should the Chrysler Corporation pay for approximately 113 acres of land, a floor area of about 800,000 square feet, where it will be able to employ between four thousand and five thousand men? How many millions? Exactly one dollar a year! Yes, one dollar!
The government is landlord to thousands of small home owners – under the Home Owners Loan Act. They pay rent. Thousands of these homes are foreclosed every month because of default In the payment of interest on mortgages which the government holds. To forestall foreclosures and evictions, these small home owners created many organizations, which sent delegations to Washington in the hope of obtaining some relief. After months of lobbying and negotiations, all that was obtained was a reduction in the interest rate from 5% to 4½%.
Such was the attitude of the capitalist government to the plight of the millions of small home owners. How different was the attitude of the government to K.T. Keller, president of the Chrysler Corporation, who went to Washington to negotiate with William S. Knudsen, Defense Commissioner in charge of purchasing and production. As one motor magnate to another, they found common interest in plundering the government, or rather the people who pay the taxes.
But the example of the Chrysler Corporation obtaining a rent-free plant is not likely to be an isolated case – but rather the general rule.
It seems that the contract between the War Department and the DuPonts, whereby the government is to finance the building of a $33,000,000 powder plant, is another example. Only here we do not know what the rental is, inasmuch as the rental was not disclosed. But it is hardly likely that the DuPont representative would drive a worse bargain with Defense Commissioner Knudsen than his colleague from the Chrysler Corporation.
Suffice it to mention that for the first half of 1940 the E.I. DuPont de Nemours Co. earned about $17,500,000 in profits from its investments in the General Motors Company. This is significant in view of the fact that Knudsen, who is Defense Commissioner, is also the head of General Motors. The fact that Knudsen resigned from General Motors before assuming his position in the Defense Commission ought to deceive no one. He may have resigned his post, but he still has huge stakes in General Motors; so, too, has DuPont. The profits in this company is their main concern, not patriotism.
Mr. Pierre DuPont put it bluntly when he had occasion to deal with the same question in 1917. He wrote then:
“We cannot assent to allowing our own patriotism to interfere with our duties as trustees (of stockholders).”
Who were the stockholders? The DuPonts! So, when Du Pont stated that it is his duty to his stockholders to prefer profits to patriotism, he is voicing the true sentiments of the industrialists, bankers and munitions manufacturers. Such is the true role of America’s Sixty Families in launching the so-called National Defense program. It is a program calculated to accumulate billions of dollars out of the intense exploitation of the workers, farmers and lower middle class.
A great deal of confusion is deliberately fostered by the press to the effect that the army and navy staff are in bitter opposition to the effort of the capitalists to reap millions out of the armament program. Nothing could be further from the truth! The attitude of high army and navy officials was accurately expressed: by Captain C.W. Fisher of the Navy Department during the course of testimony before a House sub-committee on May 16th, 1940. Here is what he said:
“In these perilous times, Mr. Chairman, we should make the government business most attractive.”
How attractive can be seen from the administration-sponsored bill to wipe out the previous 8 per cent limitation op ship and aircraft profits. But even that is only the beginning.
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Last updated: 16 August 2020