Joseph Hansen

Confidential Bulletin Shows Big Business
Primed for War Profits

(3 October 1939)

Source: Socialist Appeal, Vol. III No. 75, 3 October 1939, pp. 1& 2.
Transcription/HTML Markup: 2018 by Einde O’Callaghan.
Public Domain: Joseph Hansen Internet Archive 2018; This work is completely free. In any reproduction, we ask that you cite this Internet address and the publishing information above.

Article III

The executive position scheduled for Big Business in the military dictatorship that will straitjacket the American people when Roosevelt plunges the United States into the war now raging in Europe, serves not only to give Big Business a more direct control over the military government but also assures greater freedom for each capitalist in the mad scramble for war profits.

The whole conception of Big Business concerning the participation of the United States in the bloodbath envisages a “blitzkrieg’’ or lightning war – a war that will permit the successful shaking down of maximum profits from the battlefields with minimum danger of revolution at home against their dictatorship.

“It [the Industrial Mobilization Plan] is based upon one primary assumption – that if the United States enters a war, this war must be terminated as quickly and as successfully as possible.”

What Big Business Hopes For

That is one of the main reasons why Big Business, despite its explanation to the capitalist class that Roosevelt’s New Deal has now been converted into a War Deal for their benefit, still desires more direct control of the government apparatus. A short, snappy war, with the slaughter of American workers not great enough to have repercussions at home beyond the scope of the police, the National Guard and the F.B.I., and a huge shakedown of war orders and war profits at the expense of the people – that is the best variant Big Business can see and the one it is dealing its cards to secure.

The confidential report of the Tax Research Institute devotes considerable space to the analysis of price control under the military dictatorship and the ways and means for those on the inside to avoid those controls.

“Certain conditions in war, particularly in the early stages, disturb the price structure. Among the things which contribute to this are unusual Government demands, diminished available supply for civilian use, reckless Government buying, high cost production because of the employment of unskilled workers, increased insurance, interest and tax rates, restriction of essential imports, and inflation of the currency.”

Right Kind of “Price Control”

This paragraph was written evidently in the light of the experience of the last World War. Huge government orders were given out at enormous profit to individual capitalists; colossal fortunes were made on shoestring investments by members of the Sixty Families; billions in profits were rolled up by the giant corporations. Some of the scandals that were uncovered after the war censorship had been lifted rocked the entire nation.

“The exact method of price control has not yet been determined; this is one of the problems now before the recently appointed War Resources Board.”

And since this Board is composed of high-paid agents of Wall Street closely connected with the Morgan interests, the members of the capitalist class are assured of just the kind of “price control” that will dovetail most nicely with the profit side of the ledger.

The confidential report analyzes the various means of price control now being considered by the War Resources Board and comments as follows:

“Uniform unit prices, slightly above the bulk line of cost, will he prescribed for basic commodities and raw materials, except where it is manifestly to the national interest [That is, Wall Street’s interest – J.H.] to prescribe a graded scale of prices based on differences in most. A graded scale of prices, if carried out in full detail, is practically a cost-plus system and gives an incentive to wasteful and inefficient management. Moreover, this method involves laborious investigations, is difficult to apply, and provides opportunities for fraud and evasion. [There it is, in black and white! – J.H.] The single-price policy, allowing differentials for quality, transportation, and margins between producers and dealers, makes less of a departure from normal business conditions and is less complex in its administration. [Requires less complicated bookkeeping to cover up the abnormal take in profits. – J.H.]”

Bosses Guaranteed THEIR Cut

But whatever the system employed in the light of propaganda needs, the capitalist is guaranteed his cut in the lucrative flow of war profits:

“In the determination of prices, a Commission to be appointed in the event of war, will be guided by the fact that just compensation must be allowed. [Must be!J.H.] With this in view, the Commission may base its decisions as to price or profits on whichever of the following it deems to be most desirable in each case:

“(a) Profits earned by the industry or the commercial activity concerned over a pre-war period to be specified by the Commission.

“(b) The cost of producing the last unit of the indispensable amount of the commodity required by the war programs, either throughout the industry as a whole or upon a regional or territorial basis.

“(c) Prevailing market prices.

“(d) Actual cost of production plus a reasonable return on capital.”

The meat of this juicy capitalist nut can be extracted merely by understanding one basic fact: the Commission to decide on the control will be Wall Street appointees; Wall Street will decide what constitutes “reasonable return on capital”; and Wall Street will define what it means by “cost.” (Items such as rent paid oneself, salaries to vice-presidents, interest on “loans,” etc., or fake costs paid a holding company, give complete license in this field.)

Under the heading: “The Safeguards Assured Business in Price Control,” the confidential bulletin remarks that “Government contractual relations are to be so administered as to insure the contractor against undue risks incident to war-time production.”

Wall Street will be insured by the government against war-time risks! Its profits will be guaranteed! As for the workers herded into the Army and shipped over to Europe to do the “insuring,” their lives, wounds, and suffering can be counted as no more than the usual premium necessary for that insurance.

War Hysteria First, Profits Next

“All Prices Can’t Be Fixed,” remarks the confidential bulletin, and it adds the following inside tip for the better understanding of the members of the capitalist class:

“T.R.I. Observation: One of the important observations that the Army and Navy Munitions Board has made in its study of prices control is that prices cannot be controlled, except where there exists physical control over the goods or services. The problem of enforcement is the one greatest obstacle to the imposition of a ceiling over all prices. The Board concedes that there probably never can be established a sufficiently powerful body to control all prices, even if it were desired.”

There is the nub of the whole “price control” system. Wall Street does not desire to control prices or profits. If public opinion makes necessary a certain smoke-screen called “government control,” every capitalist is assured that it won’t hinder his profit-taking in the slightest. In fact, on the contrary, the government will guarantee his profits.

Small wonder that Roosevelt is working day and night to whip up the war hysteria that will plunge the United States into this second World War and give the itching fingers of Wall Street as soon as possible the golden feel of WAR PROFITS!

[The last of the series of four articles on the subject will appear in the next issue of the Socialist Appeal.]


Last updated on: 13 February 2018