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Jack Ranger

Tapping the Wall Street Wire

Farms Get Bigger

(3 February 1947)


From Labor Action, Vol. 11 No. 5, 3 February 1947, p. 2.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).



Farms in the U.S. are getting fewer and bigger. The average farm today is 50 acres larger than the average of 25 years ago. The >Wall Street Journal> says the trend is contrary to a federal policy of encouraging small farms, but this is a wilful misstatement. A monopolists’ government can follow only a monopolist program. Government policy for years has been to aid the big farmer at the expense of the small one.

In 1920 the Census Bureau counted 6,448,343 farms. In 1945 the number had dropped more than half a million, to 5,859,169. Half the 1945 farms had more than 500 acres each. In 1920, only one-third were that big. Today, 40 per cent of the farms are over 1,000 acres each, compared to only 25 per cent of that size in 1920. Even in the midwest, the average farm is 30 acres larger than it was a quarter of a century ago.

The war was most profitable for the big farmers. Farm mortgage debt at the beginning of 1946 was $5 billion, down 23 per cent from January 1, 1940. Total value of the nation’s farm plant, including all assets held by farm owners, amounted to $101.5 billion on January 1, 1946, up 12 per cent from a year earlier, and up 90 per cent since the beginning of 1940.

Only Big Business profited to a greater extent than did the Big Farmer during the recent war. Through its price support program, the federal government guaranteed huge profits to the farmers. (Imagine a federal government under capitalism, led by capitalist parties, setting aside billions of dollars to bolster up wages of industrial workers! But then the American workers, the majority of the population, have not one single representative in Congress nor in any state legislature. We haven’t even got a labor party yet.)

Secretary of Agriculture Anderson estimated the other day that the government may put up more than $2 billion more to support farm prices over the next two years. Some of the prices promised farmers by the government are so high as to encourage over-production —such as happened in 1946 in the case of potatoes, when a crops of nearly 100 million bushels more than could be used was produced. Mountains of potatoes rotted and are rotting in the open today.

*

Surpluses to Be Dumped

There’ll be a hairpin turn in the road for the farmers, though. Food prices are still 130 per cent above mid-1939, but the butter market is a harbinger of what is ahead. The price of butter has tumbled 25 cents a pound in just a few weeks, and it is still going down. Just now, some of the inside facts about the meanness of the milk trust are coming to light?—how they held the supply off the market in order to maintain an artificial scarcity, up to the point where the public had to cease buying the stuff.

For instance, did you know that the government cold storage report for January 1 showed there were 34 million pounds of 40 per cent cream in storage, AS AGAINST ONLY SEVEN MILLION POUNDS A YEAR AGO. This cream could have been converted to butter at any time, but was purposely held back. However, now the profiteers who held the cream are very jittery indeed, and are now putting it into butter. This is why butter prices will continue to slide.

In the north Atlantic states, butter output has jumped 325 per cent over a year ago. You’ll see more and more of this stupendous cream surplus converted into butter ... However, the milk trust has an ace in the hole? When butter gets down to 53 cents a pound, the government will step in to support that price.

*

Another branch of capitalism that is in for a letdown from its enormous war profiteering is the canning industry. Canners of fruit juices, for instance, are so flooded with goods they are at wits’ end. Orange juice that cost New York housewives 25 cents a can last fall, now sells three for 25 cents. Grapefruit juice that cost 15 cents a can in October now sells three for 25 cents. In Seattle oranges that sold for 43 cents a dozen six weeks ago have been knocked down to 19 cents. In Cleveland a retailer claims that a salesman offered him the other day orange and grapefruit juice free, if he’d just pay for the cans and cartons. A Philadelphia store owner says he dumped a fifth of his fresh citrus fruit stock because of spoilage.

Silver prices smacked down 5 cents an ounce the other day, from 76¼ cents to 71 cents, the biggest one-day price decline in 26 years. Even then, silver buyers didn’t rush in. (This is for foreign silver. U.S. silver producers, who own a chunk of the government, also have a nice racket. They got a bill through last July whereby the federal government buys their silver at 90% cents an ounce.)

Certain consumers’ goods items are now so plentiful that it can be safely predicted that prices will drop somewhat from the abnormal levels. During the war, business got the habit of taking war-time super-profits on its operations. An automatic washer which sold for $198 in 1940 now brings $270. The Ford two-door sedan which sold for $771 f.o.b. Detroit in 1939 now is priced at $1,367 (without extras and before taxes). Consumers cannot pay those prices.

With prices of some food items and household appliances declining, the housewife gets a break.

But wait a minute. The landlord is going to take up the slack. Rents are goiing up, to leave us just about where we were before. The worker cannot win lender capitalism. In the 1920s there was little unemployment but prices were too high. Then came the depression. Prices went down, but 15,000,000 of us were unemployed and millions of others took deep wage cuts. Then came the recent war. Most everyone working, but no consumers’ goods. Now peace. Prices out of sight, many goods still scarce. The shortages will soon be over, but by then unemployment will be crashing into the picture. It's a wonderful system, isn’t it?

*

Don’t be taken in by stories that, the reason prices are high is because material prices have gone up. (The bosses also say that prices are high because wages are high, but readers of >LABOR ACTION> know better than to swallow that one.) It is true that hide prices are about twice as high as in 1929. BUT THE “HIDE” IN A PAIR OF $10 SHOES IS ONLY WORTH ABOUT 85 cents. Cotton has trebled in price since 1939. BUT THE COTTON IN THE $1.50 SHIRT THAT THE STORE SELLS FOR $5.00 TODAY IS ONLY WORTH 25 CENTS. Cotton in a bed sheet costs less than 75 cents. Wool in a man’s suit, at present prices, is worth roughly $5.
 

The Recent Meat Black Market

Remember last year, when the Meat Trust in Chicago and elsewhere was crossing its heart that it wasn’t getting any livestock and wasn’t selling meat on the black market? The trust’s earning statements are now coming to light. What a story of deceit and merciless profiteering they tell. Wilson & Co., one of the Big Four, has just reported “one of the most profitable years in its history.” Net earnings rose to $8,311,560, equal to $3.43 a common share, from $5,036,602 in 1945, or $1.64 a share. In addition, RESERVES OF OVER $8 MILLION WERE SET ASIDE.

“Our year-end financial position shows a large increase in working capital, a substantial reserve against inventory price declines, a permanent reduction in our preferred stock dividend requirements, and for the first time since 1939, no obligations on notes to bunks,” says president Edward Wilson. Incidentally, a Wilson director is Martin Kennelly, Democratic candidate for mayor of Chicago, and the white-haired boy with all the liberals. The black market was mighty good to Kennelly, the Wilson Company, and the packing trust.

The monthly bulletin of the Federal Reserve Bank of Chicago reports that the meat packing industry is in the strongest peacetime financial condition in history. Let’s look at the earning reports of the three other major packers. Swift showed a 34 per cent increase in net profits. Armour’s earnings rose 2.3 times after reserves, and Cudahy’s 2.7 times, also after generous reserves. In brief, the business is wallowing in profits like a yard full of hogs. They had to sell SOMETHING to make such profits. They told the public they weren’t selling meat, weren’t buying cattle, had turned their back on the Black Market. What do YOU think, reader?


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