Max Shachtman

Behind Jones-Wallace Fight

Part I
Issues in the Fight over
Wallace and Jones

From Labor Action, Vol. IX No. 6, 5 February 1945, p. 4.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

A furious fight has broken out in Washington over President Roosevelt’s nomination of Henry Wallace to replace Jesse Jones as Secretary of Commerce.

The entire country is intensely interested in the fight and its outcome. It is hard to recall a case in which so much passion and partisanship have been aroused over the question of changing the personnel of a leading government position.

On one side, the side of Jesse Jones, are almost all the outstanding reactionaries in the country, all the extreme conservatives, all the big monopolists and their spokesmen, all the big newspapers.

On the other side, the side of Henry Wallace, has been mobilized almost the entire official labor movement. Unions and union leaders are trying to flood Washington with urgent appeals that the Senate confirm Wallace for the post.

Labor’s interest in the fight is understandable and entirely justified. Every thinking worker knows that what is being thrashed out in the dispute between Jones and Wallace deals with some of the most fundamental problems facing labor today and tomorrow.

Henry Wallace says: “It is not any petty question of personalities, but a question of fundamental policy, a question of the path America will follow in the future.” That is absolutely right.

Henry Wallace’s Credo

Henry Wallace says, about the George bill to take control of the Reconstruction Finance Corporation and other financial institutions away from the Commerce Department, that his so-called “lack of experience” is just so much talk and “this talk does not fool me or the American public.” That is also absolutely right.

Henry Wallace says that the basic question is economic democracy, that we must “remember that political democracy is at best insecure and unstable without economic democracy.” And that is absolutely right, too.

And Henry Wallace is still absolutely right when he says, as he did in his statement before the Senate committee which held hearings on the George bill:

Whatever else may be wrong with Mr. Wallace’s views, on the points cited above he is utterly, incontestably right. We have maintained these views ourselves at all times. We maintain them, no matter who else voices them.

These views express what is easily possible in this country.

They express also the hopes and longings of the working people; the people who have not until now enjoyed any of the rights spoken of by Henry Wallace.

That is why so many workers have such deep feelings that Wallace is their champion, their spokesman, their leader.

And that is why the fight over his appointment has divided the nation into such clear class camps as has not often been seen in this country.

But inasmuch as we have joined Mr. Wallace at least in agreeing that this is not a fight between personalities, but a fight over fundamental policy, the first thing that must be done is to make clear what the fundamental policy is, and what “path America will follow in the future.”

We have also agreed that labor has a stake – a big stake – in this fight. It has a stake in its own interests. It is not interested in the fight from the standpoint of the interests of big business, of the big monopoly capitalists. If it did, it could just as easily, or more easily, take its place, in support of Jesse Jones. If it does not do this, it is because it suspects or fears or opposes the big capitalists who support Jesse Jones. It want its own interests protected. In other words, labor is taking its position in this fight as a class. It may not be fully aware of this fact, but it is a fact nevertheless. Let us examine this point by looking into the side of Jesse Jones.

Jesse Jones, Big Banker and Capitalist

Behind Jesse Jones stands big American capitalism. Behind Jesse Jones stand the big bankers, the big industrialists, the masters of the economic life of the country. Behind Jesse Jones stand the united reactionaries – the reactionary Republicans, the reactionary Southern Democrats, the reactionary newspapers, the labor-haters, the union-busters, the open-shoppers, the sweat-shop idealists.

Why not? What harm has he ever done them? What has he ever done except serve them well and faithfully?

Jesse Jones is himself a banker. He is so reliable a reactionary that Herbert Hoover himself, while President, first appointed him to the Reconstruction Finance Corporation, President Roosevelt, to prove that he is a staunch friend of big business, kept Jesse Jones in that position, made that position even more important and powerful, and finally elevated Jones to the cabinet, as Secretary of Commerce.

The powers acquired by Jesse Jones under the Roosevelt Administration were little short of autocratic. In his own words before the Senate committee, he said that the RFC “can make loans in any amount, for ally length of time, at any rate of interest, to anybody.”

Why is big business supporting Jones? Because of the way he made “loans in any amount, for any length of time, at any rate of interest” – and because he did not make these loans to just “anybody.”

In the years 1932 to 1939, of all the loans made by the RFC, four per cent of the total were for loans under $10,000, twenty-six per cent of the total were for loans between $10,000 and $100,000, whereas seventy per cent of the total were for loans of more than $100,000. In a word, most of the loans went to big business, to the large corporations, to the monopolists.

Jesse Jones does not want anyone in control of the vast RFC empire – thirty-three billion dollars’ worth of it – who does not enjoy the complete confidence of big capital. Here is how he put it, delicately, before the Senate committee:

“I still think that somebody with a proved business experience of an extended nature is needed in charge of the RFC and its multiple organizations. It is bigger than General Motors and General Electric and Montgomery Ward, and everything else put together, and you don’t hear much about it because it is being run by business men, by men experienced in business, by men who haven’t any ideas about remaking the world.”

Right! Why should Jesse Jones and his fellow capitalists have any ideas about remaking the world, when the world they live in is one where seventy per cent of the loans made by the RFC go to big corporations to help them out of economic disasters into which they have gotten themselves with their system of “free enterprise,” and, above all, where “you don’f hear much about if because if is being run by business men,” that is, by the corporations themselves and their representatives? It is their world. They want to keep it the way it is. They don’t want it remade. But if the seventy and more per cent of the people, the working people, are to live like decent human beings, it must be remade.

Press Attack on Wallace

The New York Times, the chief spokesman for “free enterprise,” does not want the world remade, either. It is also for Mr. Jones. It is against Wallace. Why? Isn’t the government, and all its institutions, supposed to serve the interests of all the people? That’s what it says in the Constitution! The people, and by that we mean the working people, who make up the overwhelming majority of the population of the country, have no confidence in Jesse Jones. None of them has spoken up for him to amount to anything. Rightly or wrongly, they have confidence in Wallace. That is not good enough for the Times. It is not good enough because Wallace does not have “the confidence of the business and financial community, of whose proper and legitimate interests he would, as Secretary of Commerce, be the special guardian.” (January 23)

The New York World-Telegram, another faithful spokesman for “free enterprise,” is also opposed to Wallace and champions Jones in his place.


The World-Telegram has decided to tell the truth – to tell the brutal truth.

“The brutal truth,” says its editorial of January 23, “is that private business, large and small, is suspicious and afraid of Mr. Wallace ... An indispensable qualification for a Secretary of Commerce, we think, is that he should have the confidence of business and industry. Mr. Wallace just doesn’t.”

Let us grant that “business” – meaning big capital – does not have any confidence in Henry Wallace. Let us grant that Jesse Jones is right in saying the same thing.

But why should we have any confidence in big business?

All the reactionaries behind Jones tell us, along with Jones himself, that unless business men are in charge .of the Department of Commerce, everything will go to the dogs. Big business will “lose its faith.” It will be “frightened.” It will stop production and trade. There will be no jobs, or very few jobs. Especially will this be the case if labor has anything to say in the government. “Mr. Wallace is the leader of the most radical groups in America,” said Senator Byrd of Virginia. “He is the close friend and co-worker of Sidney Hillman and the extreme elements of the CIO.”

Just keep labor, or anyone even friendly to it, clear away from government, and everything will be all right. Business will flourish. Jobs will be there a-plenty. Prosperity will be enjoyed by all. The economic life of the country will bloom like a sturdy plant. IF – labor is kept out of control, and everything is “run by business men, by men experienced in business, by men who haven’t any ideas about remaking the world.”

Who really believes that?

What Happened Under Hoover

Under the Hoover Administration, everything was run by business men. There was not even a CIO in existence. Labor did not even have a fingernail in the government. There weren’t even any strikes to speak of. There was no Henry Wallace in or near the government; no Franklin Roosevelt; no “extreme radicals” or radicals of any kind. Just business men, big business men, and they were everywhere, and controlled everything.

The business men continued in control. The crisis, the collapse, the mass unemployment also continued,

”Free enterprise” had ideal conditions and ideal opportunities to show that it meant security, prosperity and progress for the people. It failed. It showed only one thing: its bankruptcy.

Roosevelt Didn’t Change Much

But that was not the case under Hoover alone. It was not fundamentally different under Roosevelt.

Roosevelt set out to make the system of “free enterprise” work in his own way. It is true that with the aid of the RFC and other government institutions, many of the big corporations were put back on their feet. They began to make profit all over again. But the basic problem remained unsolved.

Up to the beginning of the Second World War, that is, after seven years in office, the record; of the Roosevelt Administration showed that there was still no security, no prosperity, no progress for the people. There were still millions upon millions of unemployed. There were no jobs for them, no decent standard of living, and no hopeful prospects.

Roosevelt tried to patch up the bankrupt system so that it could breathe a bit again. He could not and would not solve the basic problem.

It was only after the war broke put, and the United States entered it, that the problem was “solved” by Roosevelt.

Factories began working at full blast. Even new plants were put up on a grand scale. Millions of unemployed got jobs. Millions more were drawn into industrial life for the first time.

It only served to prove that the bankrupt system of “free enterprise” could “function” on a high level –

“Free enterprise” and the business men had their chance under Hoover. They couldn’t even complain of “government restrictions” in those days.

“Free enterprise” and big business had their chance under Roosevelt. They did complain about “government restrictions,” it is true. But it is under these “restrictions” that they began making their big profits again. It is under these “restrictions” that they have been making their fabulous blood-profits since the outbreak of the war. What are they complaining about?

In both periods, “free enterprise” and its Jesse Joneses proved bankrupt – incapable of assuring work, decent living standards, security and progress to the masses of the people. The most they could do was to guarantee fat profits to the big corporations, the monopolists, the bankers, the capitalists.

The “business men” have no confidence in Henry Wallace, they say.

But why should labor have any confidence in the businessmen?

And why should labor have any confidence in what the business men defend so passionately and violently, the system they call “free enterprise”?

What labor needs, what labor wants, are the things Henry Wallace is talking about:

A government that will planfully assure a year-around job for all, at high wages, with a decent standard of living, assurances of good education, medical care, protection of the old and sick, all based on the highest planned industrial production.

What labor would like to know is why the government can use the greatest powers to bring production to unheard-of peaks for purposes of destruction – war – but cannot use such powers to produce for the comfort and well-being of the people in peacetime.

Labor says: To hell with all this talk about “free enterprise” and “control by experienced business men” if all it means is no jobs and no security; if all it means is breadlines, apple-selling, low wages and long hours.

Labor is not interested in the banker-talk of the banker-pet, Jones.

It is interested in Henry Wallace’s program. So are we.

But for that very reason, let us examine that program more closely. Let us see if it really provides a solution to our problems, an answer to the ardent hopes of the people. Let us see if it really offers a way out. If we do not make this close examination, we may find that in reacting violently against the cynical and cold-blooded friends of the bankers and enemies of the workers, we have stumbled blindly into a camp which is not very much better.

We want to examine, as our main point, not only the program Henry Wallace sets forth, but what he means to do to realize it. That is our next job.

Next Week: Part II. An Examination of Henry Wallace’s Program

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Last updated on 20 April 2016