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Jack Ranger

Tapping the Wall Street Wire

Business Failures Coming

(24 February 1947)

From Labor Action, Vol. 11 No. 8, 24 February 1947, p. 2.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

America’s 60 Families, who own the bulk of this country, enormously strengthened their grip on the nation’s wealth in the course of the recent war, by maneuvering the “defense” program in such a way as to channel most of the billions of dollars their way. Now that more normal peacetime conditions prevail, small business is destined to wake up to the facts – through being driven to the wall in the next few years. The >Wall Street Journal> recently reports that “the death rate among business this year will climb like a kite in a spanking spring breeze.”

In the retail field, businesses most vulnerable include restaurants, taverns, night clubs, sporting goods stores and appliance shops ... On June 30, 1946, there were over 3.5 million individual businesses in the nation, 700,000 more than at the end of 1943. In November, total liabilities of failing concerns came to $12.5 million, the highest since December 1941 ... The enormous profits being made in so many lines of business in recent years have inflamed the acquisitive- streak in the American petty bourgeoisie, so many of whom nurse a pitiful ambition to become Napoleons of business and finance. In 1946, four businesses were started for each one that shut its doors.

The Commerce Department has reported 227 new firms and 58 closings for every 1,000 businesses In operation. (The pre-war rate was about one new business for every one that closed.) Construction contracting was the most popular of eight major industry groups. There were 553 such firms opened last year for every 1,000 in existence at the start of the year.

The opening rate per 1,000 for other industry groups follows: Wholesale trade, 306; manufacturing, 269; service industries, 218; retail trade, 207 (chiefly motor vehicles and appliance and radio stores); mining and quarrying, 188; transportation, communications and and other public utilities, 149; finance, insurance and real estate, 113. The highest rate of discontinuance was in lumber and basic products, with 156 firms quitting business for every 1,000 in existence.

Discontinuance rates for other manufacturing industries in 1946 were: Machinery, 129; electrical machinery, 93; apparel and other finished products, 90; iron and steel and their products, 80; appliance and radio stores, 77; furniture and finished lumber products, 76; eating and drinking places, 75.

After each war, Big Business proceeds to shake the little capitalists out of the field, but the above figures show that a new crop of suckers comes along each generation. In the year 1920 the number of business failures bounced up nearly 40 per cent. In 1921 three businesses went under for every one that died in 1919, and liabilities totaled more than $500 million. Since the First World War monopoly has increased so greatly as to constitute almost a different quality.

In the next few years hundreds of thousands of men and women “on the make” to be bosses are going to be rudely shoved back among the masses. Today these aspiring titans of business and finance mouth all the reactionary nonsense that passes for social thinking with Big Business and its toadies. Tomorrow, when their dreams of ease and wealth crumble, their “human nature” will change. They will see things and feel things they had forgotten, or hadn’t seen and felt before. Some of this human material may be salvaged and converted into decent humanity, good union men and women, people on the march to change this immeasurably stupid, cruel and inefficient capitalist system into a socialist society.


What makes a business man tick? Where does he obtain that acquisitive drive, that passion for profit, that callousness that can overlook the social consequences of his mad race after the dollar, that ability to rationalize and excuse and justify his living off the unpaid labor of others? From the educational system, the schools, the movies, the press, the churches, of course, for all teach that it is good and desirable to be wealthy. This present system twists and distorts some people until they become little monsters, caricatures of human beings, almost like the animated dollar signs used by the cartoonists.

Here is a recent story that appeared in the press. A man named Herbert McCulla was, back in 1929, president of the National Junior Chamber of Commerce. Membership in that organization marks one as being an understudy of the wealthy, as possessing all the vices of the 60 Families but lacking their wherewithal. McCulla couldn’t wait to make his pile through the socially acceptable methods of squeezing the poor or of careful jobbery. He embezzled $9,000 from the local symphony orchestra association, of which he was secretary. McCulla, of course, was a lover of the arts. He was clumsy about his theft, was caught, confessed, received a prison term in the Nebraska state penitentiary.

There since May, 1945, he has managed to make a net profit of $1,113 as a manufacturer and dealer in novelty leather goods. He had 18 other convicts working for him, making billfolds and belts for sale to prison visitors.

In addition, McCulla, who describes himself as “a misplaced business man,” received $1,928 from the federal government as a refund on 1944 federal income tax; $437 from an insurance policy; $175 from the sale of leather working tools to convicts, and his $10 monthly salary as prison storekeeper. The warden insisted there was nothing irregular or wrong in McCulla’s business proclivities. And, from the viewpoint of capitalist morality, there isn’t, for capitalism sanctions the exploitation of the masses, even in prison.


The American Management Association and the National Conference of Public Relations Executives are worried at their failure to sell the American people on the alleged benefits of capitalism. The stenches arising daily from that system continue to blanket all the rose water sprayed about publicly by the capitalist hucksters.

The American Institute of Accounts finds itself in a dilemma. Its secretary, John L. Carey, told a meeting in New York recently that weighty questions have arisen about industry’s financial statements. On the one hand, he said, fuller disclosure of company operations might help to substitute orderly bargaining for industrial strife, and to supplant worker hostility with worker cooperation. If such information would dispel from workers’ minds fantastic notions about the size of corporate profits and if it would mollify what has been called labor’s dangerous hostility to profits as such, it might do much to preserve the economic system under which we live.” The objection to telling a little of the truth in financial statements, he continued, might “be the possible invitation of wage demands which might not otherwise be made and the conceivable use of such information by radical labor leaders as a stepping stone to participation in management decisions.” ...

William Franklin, controller of the Caterpillar Tractor Co., had a brilliant idea. He suggested that a company issue one financial report to employees, and a different type of report to stockholders. Franklin said – and here is something that every union negotiating committee can throw in the teeth of the bosses – that reports to employees often resemble “a child’s first reader printed on a valentine.” Mr. Franklin is all for changing the names of things. He suggests that the word “surplus” be changed to “profit employed in the business.” The new term, he believes, would erase the worker s notion that “surplus is an excess of some sort that the corporation should not be allowed to keep.”


And speaking of profits and surpluses: U.S. Rubber announced consolidated net income for 1946 hit an all-time high of $23 millions, equivalent to $10.23 a share compared with $13 millions and $4.44 a share in 1945 In addition, the company added $49 million to its surplus ... National Steel Corporation reported net earnings in 1946 of $20 millions, equal to $9.17 a share, compared with last year’s $11 million and $5.04 a shore ...

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