Felix Morrow

Did Roosevelt Curb Monopolists?

(5 May 1945)

Source: The Militant, Vol. IX No. 18, 5 May 1945, p. 4.
Transcription/Editing/HTML Markup: 2018 by Einde O’Callaghan.
Copyleft: Felix Morrow Internet Archive (www.marx.org) 2018. Permission is granted to copy and/or distribute this document under the terms of the Creative Commons Attribution-ShareAlike 2.0.

The most important single question to answer, in analyzing Roosevelt’s domestic role, is: what was the end-result of his denunciations of “the malefactors of great wealth,” the “gold-plated anarchists,” the “economic royalists?” Did America’s Sixty Families lose ground during the twelve years of Roosevelt’s administration? Or did they strengthen still further their grip on the American economy?

None of the mourning eulogists have dealt with this question. Yet, whatever may be claimed for the New Deal in the way of reforms aiding the “forgotten man,” if the clans of Big Business have meanwhile still further swallowed up the economy, then the net resultant is a situation in which the Sixty Families wield more economic and political power than ever.

“Equality of opportunity as we have known it no longer exists,” said Roosevelt during his 1932 campaign, and promised to recreate equality of opportunity. The enemy of such opportunity was indicated by Secretary of the Interior, Harold L. Ickes, in a famous speech on December 30, 1937. America, he said, had been “controlled at least until 1933 by monopolies that in their turn are controlled by a negligible number of their stockholders.”

Ferdinand Lundberg’s book, America’s Sixty Families, published in 1938, showed that behind the abstraction Big Business was the very living reality of sixty families who controlled the monopolies. Ickes in his speech borrowed Lundberg’s title, and declared that the fight is “between the New Deal and the Bourbons of the sixty families who have brought the rest of the businessmen in the United States under the terror of their domination.”

What Ickes did not borrow from author Lundberg was the latter’s conclusion: “It is safe to predict that when the New Deal is over the poor will be no richer, the rich no poorer.” (p. 449)

The NRA Aids the Trusts

“Practically all of our greatest historical figures,” said Ickes in that same speech, “are famous because of their persistent and courageous fight to prevent and control the overconcentration of wealth and power in a few hands.” But since he himself admits that the Sixty Families ruled “at least until 1933” it means that Theodore

Roosevelt, Wilson and Roosevelt’s other “trust- busting” predecessors had failed in their “fight." Neither Ickes nor Roosevelt ever tried to explain what new methods they were using which their predecessors did not; and indeed there were none.

The end-result of decades of “trust-busting” was shown in the study of Berle and Means: at the end of 1929. The 200 largest non-banking corporations in the country controlled some 49 per cent of all corporate wealth. If the same relative rate of growth was maintained by the larger and smaller concerns, then the 200 largest corporations would have 70 per cent of the nation’s corporate wealth by 1950.

That this rate of growth was at least continuing, if not speeding up, was shown in a study. The Structure of American Economy, published in 1939 by the government’s National Resources Committee. It showed that from 1929 to 1933, the 300 largest corporations had increased their hold of all corporate wealth from 49.4 per cent to 57 per cent! At this point the National Resources Committee study (published, note, in 1939) becomes silent, with the explanation (p. 107) that “with the small staff of technicians available” it had been unable to “carry the compilation and estimating beyond 1933.”

How the Monopolies Thrived

But we will find convincing figures elsewhere. What was the result of “trust-busting” Roosevelt’s famous NRA experiment?

After 1912 the main form of monopoly practice had become that of trade associations. Instead of bringing the main productive plant of an industry openly into a single corporate monopoly, obviously violating the anti-trust laws, Big Business got virtually the same results by banding the main plants together in a trade association.

The one weakness of the trade associations was the surreptitious means they had to employ to coerce some maverick corporation into line. Under Franklin Delano Roosevelt the NRA gave these trade associations the force of law, enabling them to use government enforcement to keep dissenters from violating the price-fixing and production-limitations decreed by the trade associations.

The two years of NRA ended when it was declared unconstitutional in 1935. But it had done its work. Never had the big corporations held so large a section of every industry.

Some graphic figures will illustrate this. The figures are the government’s own, for 1937, (TNEC Monograph No. 27), analyzing who controlled the output of 1,807 representative products:

Obviously, these figures show, Roosevelt had done nothing to bring equality of opportunity back for most of the 300,000 corporations, not to speak of the unincorporated small businessman, the worker and farmer.

Of the corporations reporting to the Bureau of Internal Revenue in 1936, less than 4 per cent of them received 84 per cent of all corporate net income. One-tenth of one per cent owned 52 per cent of the assets of all those reporting, and realized 50 per cent of all the profits.

Nor did the amount of these profits suffer at the hands of the New Deal. This is indicated by the fact that dividends in the boom year 1929 were $16 billions and in the depression year 1938 were $15 billions. Contrast this with the fall of wages from $63 billions in 1029 to $54 billions in 1988.

Monopolies During the War

What happened when war production began can be told in a few concise facts.

In his report for the fiscal year 1941, Assistant Attorney General Thurman Arnold reported that “three-fourths of all our vast war contracts have been let to 86 concerns.”

On January 20, 1942 the Vinson (House Naval Affairs) Committee reported that 15 large companies received over 60 per cent of all navy contracts. On February 5, 1942 the Small Business Committee of the Senate reported that 56 corporations now have 75 per cent of all war contracts.

One indication of the effect on small business is the change in the metal-working industries, reported by C.F. Hughes in the August 6, 1944 N.Y. Times: “Plants employing 2,500 workers or more in 1939 produced approximately 23 per cent of the nation’s shipments; in 1943 they ran well over 55 per cent.”

The general effect on small business in the postwar world was indicated by the Truman (Senate Investigating) Committee already in 1941:

“It is clear that their [the big corporations] competitive position in the economy of the nation is being vastly improved by the war, and at a time, moreover, when tens of thousands of small businessmen are being forced to stop production while they watch the value of their plants destroyed and perhaps see their machinery seized and transplanted to the plants of large defense contract holders.”

The Triumph of Monopoly

Wartime profits, after taxes, are double the 1936–39 average. But this is only part of the booty. Twenty billion dollars worth of new industrial plants have been built by government money for war production. Five billions of these is already privately-owned, by means of five-year tax-amortization certificates. For example, Bethlehem Steel ordinarily computes depreciation on a steel plant as 2.8 per cent annually; under the tax amortization certificates, however, it has been able to charge off 20 per cent annually! The other 15 billions of government financed plant, now “leased” to their operators, will be “bought” by them for a song, we can be sure, whenever it suits their purposes.

The magnitude of these figures will be realized if we recall that, the entire industrial plant of this country before the war was valued at 26 billions.

In November 1940 the Truman Committee warned:

“A large number of small businesses are already closing their shops ... Great, care must he taken to assure that we do not destroy the American way of life by adopting the wrong methods of defending them ..."

But that “American way of life,” the “free enterprise” so vaunted by Roosevelt, already admittedly non-existent in 1933, could not be brought back. The record shows that Roosevelt’s twelve years in office were another stage in the triumph of monopoly.

(This is the second of a series of articles on Roosevelt. The third will appear next week.)


Last updated on: 7 November 2018