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Jack Ranger

Tapping the Wall Street Wire

How Are the Farmers Doing?

(27 January 1947)

From Labor Action, Vol. 11 No. 4, 27 January 1947, p. 2.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Farmers’ gross national income in the United States in 1946 will total $23.5 billions, approximately $2 billion more than the previous peak in 1945. Naturally, it is divided very unevenly. Pre-war farm income was around $10–$11 billion ... The Agricultural Department is preparing to spend $1.8 billion to support prices of farm products in the next fiscal year ... A rise of 4.3 per cent in retail food prices between October 15 and November 15 boosted the food price index to 187.7 per cent of the 1935–39 average, 35 per cent higher than a year ago.

... For years the price of butter and milk in the United States has been set by the price of butter on the New York Mercantile Exchange. And for years, various individuals have utilized that fact to manipulate butter prices on the exchange. Recently the government filed criminal charges against the Dairymen’s League Cooperative Association and its officers, charging such manipulation. League officials admit they bought 668,060 pounds of butter at 84 cents a pound in the week ending December 24, because if butter had been permitted to drop below 84 cents it would have resulted in a loss of 22 cents a 100 pounds in the price of milk produced by members of the league in January. By spending a half million dollars, the league artificially held up the price of butter and milk, which cost the consumers millions and earned for members of the league a few million extra dollars ...

Incidentally, the social philosophy of the various farm producers’ cooperatives is just about as reactionary as that of the big bankers and industrialists. With a few exceptions, they support the right wing of the Republican Party ... Organized labor has registered one of its biggest failures in its relations, or rather, lack of relationships, with the farmers. Big Business is a past master at maintaining contact with and influencing the farmers, strictly to the gain of Big Business. It is good that the AFL has issued a national charter to the old Southern Tenant Farmers League. But what is really needed is a broad social program by organized labor to reorganize the whole economy, one that will offer an alternative to the present miserable system. That means a national labor party, a political approach by labor to the poor and middle class farmers.


Notes on Business

American Big Business is hip-deep in the riches of Venezuela, one of the richest countries in the world. The nation’s petroleum reserves are estimated at 5.6 billion barrels; it has mountains of high grade iron ore. Bethlehem Steel is building a "loading bridge" on the Orinoco River to put mined ore into 3,000-ton barges, destined for Baltimore. U.S. Steel’s subsidiary, the Oliver Mining Co. (which runs northern Minnesota) has a concession in Venezuela. United Merchants and Manufacturers, Inc., is building a plant to make rayon. General Electric, Caterpillar Tractor and International Harvester are all putting up buildings in Venezuela for warehousing. A group of U.S. bankers have formed an organization known as La Financera to finance new businesses in that country.

The biggest oil operator in Venezuela is Creole Petroleum, a subsidiary of Standard, Oil of New Jersey. Other U.S. oil companies building new refineries are Mene Grande Co., a subsidiary of Gulf Oil, and Sinclair. Socony Vacuum has a 3,000,000-acre concession. The Texas Co., Royal Dutch Shell, Atlantic Refining Co., Pantepec Oil Co., Caribbean Petroleum Co., and the British firm of Colon Development Co. all have concessions in Venezuela. Like a battery of leeches, the foreign imperialists are draining the wealth of that nation. Recently, Juan Perez Alfonzo, minister of development of the Venezuelan government, timidly suggested that his government should receive 50 per cent of the profits from oil operations instead of the present 16⅔ per cent. New York spokesmen for the oil trust immediately labeled the suggestion “impractical.” The rich and powerful always find it “impractical” to get off the backs of the poor.


Economic Trends

The rubber industry is winding up the biggest and most profitable year in its history. Combined sales for the 1946 fiscal year of the five Akron rubber companies are expected to be close to $1.6 billion, compared with the best pre-war record of $650 millions. Goodyear’s earnings this year are expected to amount to at least $15 a share of common stock; 1940 earnings were $3.44. Firestone’s earnings in the first half year were $6.09; Goodrich, first half year, $8.74; General, first half year, $5.19, compared with $2.20 for all of 1945; Seiberling, $3 this year compared with $1.33 last year.

The newspaper and magazine publishers have a nice racket with the Post Office in the second class mail rates. In the fiscal year 1944–45 it cost the Post Office $149 million to handle this second class mail, for which senders paid only $29 million. The extra $120 million? That came out of the profits made by the P.O. on first-class rates charged the public ... Packard has raised its prices’ on cars an average of $62, while Ford has lowered prices $25–$50 a car ... Since the end of OPA furniture prices have been raised from 10 to 30 per cent throughout the industry. Rug prices have risen 10 per cent. British exports for November totaled $368,400,000, an all-time high. This represents about 117 per cent of the 1938 export average, even allowing for increased prices. Machinery and vehicles accounted for 28 per cent of the total.

U.S. capitalism scoured the world for copper to make the cartridges during the war. Now the U.S. is facing an acute shortage of copper scrap. So it is planning to go to Germany and reclaim the copper scrap, in the form of fired cartridge cases, from German soil. There’ll be a profit in it, so the work will be done by private importers.

Both newspapers and radios are preparing to raise their advertising rates another notch ... Loew’s, Inc., one of the largest Hollywood film producers, has purchased a theater in Antwerp, Belgium, and has acquired holdings in other theaters in Geneva and Lausanne, Switzerland. Loew’s now obtains about 40 percent of its gross income from foreign sources and expects to increase this to about 50 per cent through theater purchases and increased distribution of films abroad. The company has new production studios in London ...


The National Debt

The U.S. has for the first time in its history a national debt that exceeds the annual national income and represents a per capita burden eight times greater than after World War I, according to a study recently made public by the Committee on Public Debt Policy. When the U.S. entered World War I the national debt represented about three per cent of the national income. By February 1946, it was 180 per cent as great as the annual national income. The burden of national debt resting upon each man, woman and child in the U.S. is today $1,981; after World War I it was $240; after the Civil War, $78. The study was prepared by the late Gen. Leonard P. Ayres, who was considered a whale of an economist by Big Business.


A Milestone to Decay

Few editors noted an important turning-point in the history of American capitalism that occurred December 22, when the Association of Southern Commissioners of Agriculture issued a plea for strong, protective tariffs for American agricultural products. The association denounced the reciprocal trade treaty program of the federal government, and called for an end to the 18 trade treaties negotiated under Roosevelt’s administration. For more than a century southern agriculture has traditionally been a defender of “free trade,” that is, it has fought to break down trade barriers among the nations. U.S. agricultural commodities have in the past fed a good share of the world. Indeed, American capitalism grew up on the profits garnered in the food sold abroad, food that could be sold at prices with which the rest of the world could not compete.

But now the old system is growing old, is decaying.

“Due to the kaleidoscopic changes attending the national economy of the United States in a more modern world," state the southern agriculturalists in their appeal to President Truman and the federal trade commission, "we are with reluctance compelled to burn all bridges and to make prayer to the chief executive that he now retain in behalf of our agricultural products the vestiges of tariff protection which still remain of the act of 1930 ... and that he keep the markets of these United States open to (us) for the safe of American produced crops of fats, foods, feeds, and fibers, without an overburden of competition from foreign producers of identical crops."

The petition was not confined to crops of the South. It asked for protection for wheat and corn, for livestock, potatoes, fruits and vegetables, and, of course, cotton.

The farmers would turn back the clocks of history and would seek to establish “capitalism in one country” here.

“Let us,” they urge, “in the cotton South sell our farm products in the American markets and with the proceeds thereof buy the products of our home industries.’ America then will have the products and the industrial goods. Buy your farm products abroad and ’tis true you will have the products, but they, the foreigners, will have the tractors and automobiles while our own agriculture goes back to subsistence level of diet and life.” ...

The American farmers have good reason to feel alarmed at a future which spells nothing but misery and decay for them. During the recent war, a good section of the farming population prospered here as they have never done before. But it is the last flare-up of health they are destined ever to feel, in all likelihood. The skids are greased and waiting. Why this is so I shall take up in a future article.

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