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Geo. Clarke

Wall Street Cracks Whip on Congress

Efforts to Save Capitalism Continue – New Deal in 1934 Raised Prices, Profits
– Put New Millions on Relief

(January 1935)

From The New Militant, Vol. I No. 4, 5 January 1935, pp. 1 & 4.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Flushed with its recent electoral victory the Democratic Congress opens in Washington once again to do the bidding of the master. The master is not Roosevelt or the so-called sovereign people. The guiding spirits of the nation sit not in Washington but; many miles to the north, in the man-made canyons of New York. It is the interests of Wall Street the legislators will serve.

The entire history of the New Deal is alive with instances proving the old maxim that the government is but the “executive committee of the ruling class”. Roosevelt and a willing Congress took hold of the political reins of American capitalism, just as it was being steered into the ditch, and brought it back onto a safe highway. An unofficial spokesman for the administration, Raymond Moley, says flat-footedly: “Basically the New Deal was an effort to save capitalism.”

Ungrateful Wall Street

Big Business may appear ungrateful to Roosevelt for the helping hand he gave it when in need. But if Wall Street has been grudging in its compliments, this is no indication that Roosevelt and his congressional majority have stinted in their grants. The actions of the President when the banks were on the verge of collapse and the six billion dollar blood injection into the prostrate financial and industrial institutions of American capitalism speak louder than compliments.

Capitalism has reaped a lucrative harvest under the benign administration of Mr. Roosevelt. The Journal of Commerce reports that over six billion dollars in the form of corporative interests and dividends have flowed into its coffers for the year 1934.

These fabulous profits have not been gained in an era of well being and prosperity for all. The economy of scarcity amid abundance is as striking a fact under Roosevelt as under Hoover.


The promises of Roosevelt to the stricken working class groaning under the full weight of the mounting years of economic crisis have been remarkably prolific. But even as these promises gained in ozone volume they receded in real substance. The talk of recovery has yielded little to the workers. Unemployment, according to the notoriously conservative A.F. of L. figures, shows an increase of 550,000 from October 1933 when the number of jobless stood at the figure of 10,122,000 to October 1934 when it has risen to 10,672,000. The past year has seen an increase of over one million families on relief. Richberg himself estimates that by February 1935 more than 5,000,000 families or over 22,000,000 persons will live on relief pittances.

”No one shall starve,” said Roosevelt, and his Democratic Congress cheered him to the echo. The meaning of that promise is now clear. It has meant that death from starvation should be avoided to avert an explosion of discontent stored up for more than five years. Its corollary, however, has been that wages and relief levels must keep the masses on the border of starvation. The recent decree of relief administrator, Harry Hopkins, slashing work relief wages from 40 to 30 cents an hour is a veritable dynamite cure for those suffering from New Deal promises.

Employed Workers

Employed workers have fared no better than those on relief doles The process of levelling the wage of skilled workers has been a high point of accomplishment under Rooseveltian codes. Its counterpart has been a standard of minimum wages slightly above the government handouts. And these standards have rarely been enforced. How significant is the fact that thousands of Detroit automobile workers, ostensibly living under a paradise of capitalist paternalism, would rather depend on relief checks than on the abominable wage of General Motors or Henry Ford!

On the other hand food prices have risen 28 percent over the figure for April 28, 1933. But payrolls have actually dropped 5.2 percent for the third quarter of 1934. When the working class tried to bridge this yawning gap, the New Deal has thrust its elbow in the way. Strikes have either been prevented or, once under way, pulverized by a multitude of arbitration boards. And now, the crowning stroke is the so-called truce proclaimed by Roosevelt with the direct collusion of William Green and the manufacturers. With the help of its Judas leaders labor has been crucified on the cross of the National Run Around.

According to many noted Tories in banking and industrial circles the measures taken by Roosevelt and his Congress have been the very essence of Bolshevism. Now, however, they are rubbing their hands with satisfaction. Roosevelt, they say, is moving to the right.

If what they mean is that left implies more promises and right fewer promises there is probably little truth in what they say. For this is no time for Roosevelt to cease his promises. Especially when Virgil Jordan, economist for the National Industrial Conference Board declares to a gathering of business men that “We are little, if any, nearer recovery than we were two years ago ...”

The speeches of Roosevelt and the willingness of his last Congress have been a bone in the throat of the working class and a boon in the pockets of the plutocrats. The Congress soon to open bodes nothing better and probably much worse. The big planks in the new “new deal” program are widely advertised as a comprehensive “Social Security” program. But the recent social security conference was hardly under way when it received a warning from Roosevelt that he would tolerate no “wild” ideas. The “bright” feathers in this plan are loans to home owners, public works and unemployment. Gems of deception.

It is sufficient merely to review the previous history of this plan to understand who profits by Roosevelt’s altruism. Of the $200,000,000 expended by the Home Owners Loan Corporation more than 90 percent has gone to banks, insurance companies and realty agencies. The ballyhoo about clearing out slums and building homes for the poor has become in reality a building program for people with means. The poor cannot afford the rents demanded by government housing.

Public Works

All this is intimately associated with the famous public works program which it is reputed Roosevelt, with the certain consent of his Congress plans to extend. The past speaks eloquently on this matter. Of the $2,711,000,000 in PWA allotments almost two hundred million dollars went in subsidies to railroad companies. Large dips in this pork barrel were taken by the army, the navy and the air force. Relatively few men were given jobs through this method. Some time ago the Nation reported that only a few thousand men were employed on such an enormous project as the N.Y. Triborough Bridge which called for millions in expenditure. The one way public works can start employment even on a modest scale is by entering into competition with private industry. And the very idea of such a thing is sacrilege to Roosevelt and company.

The last and probably most important measure, which seems assured of adoption in the new Congress is some form of unemployment insurance. Relief has proved to be very costly. Bankers and manufacturers have been howling for as speedy an end of it as possible.

But since unemployment shows no real signs of decreasing and since a permanent jobless army reaching well over the seven million figure is here to stay, some permanent, and less expensive method of keeping Potters Field from filling up too quickly must be found. Roosevelt no doubt has a solution in an unemployment insurance scheme where the largest part of the receipts will come from the miserably paid workers and where the unemployed will receive this insurance for a few weeks of the year on the condition that they accept any sort of job, at any wages offered, even a strike-breaking job.

Congress opens with the New Year prepared to repeat its services of the last year – not for labor, which it can never serve – but for capital which it must serve. Its legislation will remain two-sided – new deal and raw deal, with the workers on the short end of the stick.

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