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Labor Faces Year of Fight to Live

(January 1931)

From The Militant, Vol. IV No. 2, 15 January 1931, p. 1.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

The American working-class faces the year 1931 with heavy losses behind it and with long, hard and militant struggles in front of it, If it is to resist successfully the savage onslaught against it in the future. In one of the country’s foremost bourgeois economic reviews, we read:

“We estimate that the current rate of annual income of all workers, exclusive of those in agriculture and Federal employ, is approximately 35 billion dollars, as compared with a peak rate in 1929 of about 44.6 billion. This represents a decline of 9.6 billion, or 21.5 per cent. The most severe reductions have occurred in the building and metal trades. In manufacturing industries, unusually severe declines have been registered in most branches of textiles and iron and steel, and in lumber, leather, brick and tile, glass, brass and bronze, automobiles, agricultural implements, electrical equipment, pianos and organs, rubber products and automobile tires.”

The Decline in Workers’ Income

This decline in the workers’ income is hardly transitional. As was pointed out in the last issue of the Militant, it is the expression of a definite trend in boss class strategy and has only reached the first stages of development. With the fall in the purchasing power of the masses, the economic crisis continues to deepen. According to the bourgeois statisticians, business has dropped about 30 percent “’below normal.” Despite all of Hoover’s optimism, despite the promises of the politicians and the mockery of the “buy now” campaigns, sales have descended to new lows, regardless of the continuous downward curve of commodity prices.

An extremely interesting computation has been made by Dr. Lewis H. Haney of the N.Y.U. Bureau of Business Research (see the statistical table printed below):














Manuf. Products














Automobile Prod.







Machine Tool Orders







Sales, Finished Steel







Unfilled Orders






Stocks Manuf. Goods






Wholesale Sales







Dept. Store Sales





















Highly significant are not only the composite figures, which are comprehensive enough, but also those for machine tool orders, which Dr. Haney terms “barometric”. The difference there is one of more than 95 points between November 1929 and November 1930, with 1926 as “normal” or 100. To predict a quick recovery on the basis of these figures is beyond all reason. Even the rise in automobile production is characterized as “of doubtful significance ... In our opinion, consumer purchasing power [payrolls, Ed.] has been so reduced that automobile producers must remain close-reefed during the first half of 1931.” This abysmally low ebb of production in the basic industries, combined with the perpetual, cancerous agrarian crisis has had similarly disastrous reverberations on the stock market. The World Almanac for 1921 tells us that:

The Bank Failures

“Total listings [on the Stock Exchange] increased nearly one-third at 1,296,845,244 shares, had a market value of $55,025,710,617 or an average of $42.43 per share, on November 1, 1930 as compared with $87,073,680,423 or $63.06 per share, for 1,048,359,362 shares on October 1, 1929.” While the number of shares has risen by about 250,000,000, their value as a whole has fallen by close to $33,000,000,000 within the last year or to nearly one half their value per share. “In banking, outstanding credit has been reduced by $5,000,000,000 ... Fully $16,000,000,000 to $18,000,000,000 of our member bank funds continue tied up in loans on securities and in investments.” With the results that: Failures of banks in the U.S. in 1930 were more than double in number and more than four times greater in liabilities than in 1929.” With “the number of failures as 934 and the liabilities as $908,157,788 compared with 437 involving $218,796,562 in 1929.” (Report by R.G. Dun and Co.)

The failure of the Bank of the U.S. at the end of the year was by no means a culminating point in the process. On the contrary, it was simply proof that the bigger banks would not escape the ravages of the crisis and that the future will further undermine their solvency. A Washington dispatch to the New York Times of January 8, states:

“The daily average volume of Federal Reserve credit outstanding during the week ending Jan. 7, as reported by the Federal Reserve banks, was 11,355,000,000, a decrease of $44,000,000 compared with the preceding week and of $220,000,000 compared with the corresponding week in 1930.”

The shrinkage of credits extended by the Federal Reserve Board, coupled with the tie-up in funds – in loans on securities and in investments – involves a whole series of new bank crashes very shortly, and all the attempts of the government to execute mergers, to intensify control, to force through a system of separate “thrift accounts” and restrict loans, as well as all other preventive measures of a similar nature, are bound to hit against the wall of inner contradictions of the profit system, especially aggravated by the crisis.

It is the duty of the Communists to point out these developments and their consequences, as well as to propagate them. To compete with bourgeois demagogues in organizing the petty-bourgeois bank depositors for the “struggle” around their bank books and grocery stores, by inflaming all their petty and futile property-instincts – as is being done so disgracefully by the official Communist party leadership – is to make a caricature of revolutionary tasks, and to compromise Communism in the eyes of the class-conscious workers. The task of Communists in respect to the small bourgeoisie, is to explain and convince them of the absolute inevitability of the collapse of capitalism. Politically, to neutralize and detach them from the bourgeoisie. As to the workers who are hit by these events, their struggle bears a very distinct class character but the tasks before them are concentrated on an entirely different front.

To think that the capitalist system has already reached the precipice, however, is utter self-deception. The flight of American capital to foreign enterprises, the opening up of the Chinese market by a stabilization of the silver standard in the Orient (in which American capitalists are taking the initiative), further rationalization at home and above all the extension of layoffs and wage-cuts, these are the ways by which stricken capitalist economy is attempting a solution. The degree of their success or failure depends in very great part, upon the militancy of the American workers.

The official organ of the labor skates, who only last year sang eulogies of the bosses and their “rugged American individualism” (for workers only) concluding class truces with them and lulling labor into inaction, reports “with alarm”:

Figures for dividend payments of all corporations for 11 months of 1930 were above 1929 by $346,600,000 – 11 percent ... Adding interests payment to dividends, the figures are $7,287,600 for 11 months in 1930 against $6,882,300,000 for the same period in 1929, an increase of $405,300,300. Standard Statistics estimates the decreased in wage payments in all industries this year has been $8,800 million.” (American Federationist, January 1931.

But are the bureaucrats of the A.F. of L. thinking of struggle even now? Hardly. They merely ask, in the voice of the timid, boot-licking lackeys that they are, “whether the profits of the recent prosperity have been wisely spent.” They whiningly plead that pittances granted to the workers from these profits “would be a sustaining force not only to business but to the social standards [sic!] of our whole nation.”

While the labor fakers strive to keep down the proletariat by their zealous services to the bosses, the task of the Communists is to expose them and to rally the workers for struggle by a broad united front on a basis of immediate demands such as the thirty-hour week without wage-cuts, recognition and credits to the Soviet Union, social insurance paid by the bosses and their government. The organization of real mass unemployment councils on an industrial basis, uniting the workers and the jobless must be carried out without the methods of mechanical control which only serve to abort them. The main danger to the revolutionary movement lies in a relapse into opportunism, so illuminatingly revealed by the recent election and petition campaigns of the Stalinists, who today pretend to advance the Communist party. A broad united front led by the Communists must unfold the defensive of the workers and train them in collective struggle for class solidarity and the successful offensive.

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Last updated: 21.11.2012