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Jack Ranger

Tapping the Wall Street Wire

(21 April 1947)

From Labor Action, Vol. 11 No. 16, 21 April 1947, p. 2.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

BIG Business profits and high prices must be pretty outrageous indeed for chairman E.G. Nourse of the government’s Council of Economic Advisers to announce publicly that industry can and must pay wage increases without raising prices. Indeed, the profit position of most concerns has led the council to the conclusion that there is room for both wage increases and price reductions, according to the New York Journal of Commerce. Which is precisely the view expressed by Robert Nathan whose private research agency produced a wage-price study for the CIO.

Nourse is reported to have told Truman that industry is not going to reduce prices voluntarily, a fact supported by independent surveys made by the Wall Street Journal and the Associated Press.

Chief concern of the White House is that labor will become so aroused at the present situation that a series of savage strikes will shortly ensue. So Truman is putting on a show about pressing business to turn prices downward.

Just how much worse off are we than on V-J Day? Back in January 1945 take-home pay of industrial workers hit $47.50, highest of the war period. Today, weekly earnings average just under $47. But the cost of living, according to the Department of Labor, has soared over 20 per cent since the war’s end. So despite all the efforts of labor to catch up with prices – the auto strike, the coal strike, the farm equipment strikes, the rail strike, and all the other strikes – we are 20 per cent worse off than we were 25 months ago.

Obviously, union leadership has not been aggressive and militant enough in defense of labor’s position. And just as obviously, economic action alone has shown itself inadequate. Labor must enter the political arena with an independent party of its own. The Republican-Democrats are not interested in defending labor’s position.


The Oil in the Middle East

Though Truman, in his statements on U.S. intervention in Greece and Turkey, has not even mentioned the oil of the Middle East, it is perfectly obvious that a big factor impelling him to act is the desire to protect the investments of the U.S. oil trust in the Middle East. Here, briefly, is the history of the Middle Eastward oil fields.

Just 50 years ago, the German-controlled Baghdad Railway obtained from the Turkish government rights for a railroad from Anatolia to Baghdad. The Germans also attempted to acquire mineral rights in the region then known as Mesopotamia. Shortly before the First World War, Germany came close to her goal of controlling the Persian oil fields. She was negotiating with the British Anglo-Persian Oil Co. and the Royal Dutch-Shell group, and her insistence in forcing through an agreement was a prime factor in bringing on the First World War. At the outbreak of that war, Britain and Holland reneged in their agreement with Germany, and the interests of Germany’s Deutsche Bank in Arabian oil was taken by the English. After the war, France managed to chisel from Britain the 25 per cent interest in Arabian oil once held by Germany.

About this time, Standard Oil muscled in and demanded “equality of commercial opportunity,” with the support of Washington. Indeed, the U.S. Department of Commerce invited all interested American oil companies to meet in Washington, to discuss participation by U.S. companies in the development of Middle Eastern oil resources. In 1928 fhe U.S. companies finally obtained a 23.75 per cent, which subsequently was split equally between Standard Oil of New Jersey and Socony-Vacuum Oil (formerly Standard Oil of New York). From 1934 to 1939 Standard Oil of New Jersey was receiving about 9,500 barrels a day from the Kirkuk field in Iraq.

With the declining importance of European oil countries, the oil in the Middle East has become more important to the U.S. oil trust, which recently announced plans to invest about $250 millions in Middle East oil. It is this investment which the U.S. government is moving to protect.


New M-Day Plans

At a recent meeting in Chicago of the Navy Industrial Association, Rear Admiral C.E. Braine of the Navy outlined the developing plan for industrial mobilization in the next war. The Navy Industrial Association is composed of the 470 companies who got the gravy from the Navy in the last war.

Under the plan, industrial plants would be segregated into four classifications, depending upon the type of plant and the product manufactured. The ultimate plan of the Navy and Army, it was explained, is to obtain the total requirements of a particular product or type of equipment “in case of an emergency,” and to allocate production to a particular plant. The plan is to have one branch of the service, either the Army or Navy, order all requirements for a particular product, for both.


Economic Notes

American consumers must expect to pay over $38 billion in taxes for the fiscal year of 1947, the Northwestern National Life Insurance Co. has reported. This amounts to 22 cents of every dollar in the weekly pay envelope. Of the total taxes, only $21.5 billions will be paid directly, in personal income taxes and sales taxes. The remaining $16.5 billions will be paid through indirect “sneak” taxes.

Consumers will contribute over three-quarters of the combined total of federal, state and local tax revenues, which will add up to $48.5 billion, absorbing 28 per cent of total national income, the company stated ... Manufacturers of men’s shirts have admitted to the New York Journal of Commerce that the bulk of the white and colored shirts now appearing on the counter at $2.95 are comparable to those pre-war shirts selling for 79 cents and 89 cents. The shirts selling today for $3.95 sold before the war at about $1.75, the report said. Shirtmakers snicker at the quality of present-day shirts.

The Federal Trade Commission has informed Congress that 1,800 companies have been gobbled up by Big Business through merger or purchase since 1940. Eighteen of the nation’s “very largest companies” – meaning those with assets above $50 million – absorbed 242 smaller companies, for an average of 13 smaller, companies each.

A sure sign that wages are today inadequate is the report of the U.S. Brewers Foundation, which admitted the other day that in February the nation’s brewers sold only 85 barrels of beer for every 100 sold a year ago. One New York tavern operator told the Wall Street Journal that beer sales in the city were 30 per cent below a year ago. The manager of a big Cleveland tavern said that his March sales were $7 per cent below a year ago. Said he: “The reason is plain. It’s the same thing that, has cut liquor sales 40 per cent to 50 per cent. People just don’t have the money to buy.” In Detroit a spokesman for a tavern association comprising 500 taverns said that overall tavern business on beer, wines, and liquors was running 35–40 per cent below a year ago, and out in San Francisco tavernmen said sales have plummeted as much as 60 per cent from the 1946 level.

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