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Jack Ranger

Tapping the Wall Street Wire

(19 May 1947)

From Labor Action, Vol. 11 No. 20, 19 May 1947, p. 2.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Watch This Small Shadow

Fifty-six million persons were gainfully employed in March, 1947, That was even higher than the wartime peak of 54.6 million in July, 1943, The profits of Big Business are enormous. Wages, to be sure, are lagging far behind prices, yet the capitalists aren’t particularly worried. After all, there is still a sizable foreign market, is there not, which accumulated dollar credits during the war and which is still anxious for American goods. If the lower-paid strata in this country are priced out of the market, well, it is too bad, but the goods can be sold in Latin America, South Africa and Europe. Then, the Truman policy of offering big foreign loans assures a big market abroad for some years to come. Indeed, the sun of capitalism shines brightly across the land.

Yet, if one looks steadily of the horizon, an unmistakable shadow can be seen. It is the shadow, of unemployment, and if is advancing. Current unemployment is around 2.4 million – up 90,060 from January to February alone. Headlines like the following are beginning to appear in the financial papers: INDUSTRIAL LAYOFFS REPORTED IN WINSTON-SALEM AREA – OREGON WOOLEN MILLS CURTAIL OPERATIONS AS DEMAND FOR GOODS DROPS. In Winston-Salem a small hosiery firm has laid off half its total working force, another large hosiery firm is open part time, a candy maker has cut 20 workers from a force of 135, and a tobacco firm has most of its force on part time. In Portland, Ore., several mills have reduced operations arid discontinued night shifts. A number, of Los Angeles factories had recently cut back from six to five days. Some Pennsylvania textile mills are following a "one week on, one week off" policy of employment, and in Schuylkill County there are about 18,500 idle. The New York Central Railroad recently laid off 7,000 men. In Chicago there are truck drivers, watchmen, musicians, bartenders, salespeople and bookkeepers looking for work. In New York City there are about 250,000 drawing unemployment compensation – Macy’s has laid off 600, and layoffs in the garment district run into the thousands.

The would-be Napoleons of business who were going to lick the system by getting rich are already dropping by the wayside. On one business block on Chicago’s South Side, three of ten stores are vacant, while the drug store on the corner has changed hands twice because of distress. Out in Portland, the Oregon Construction & Sales Co., which was building “low-cost” homes for veterans, was recently forced into bankruptcy. In New York State the Veterans Administration reports defaults on 106 of about 5,000 loans it has guaranteed under the GI bill. A Los Angeles credit manager says that the rate of small business failures there is “appalling” – in the first two months this year, there were 45 business failures with claims of $1.5 million, compared with 12 failures in the same period last year, with less than half a million in claims. Among the failures this year are eight small manufacturers, four restaurants, two shoe stores, two upholstery shops and a jewelry store, a hardware establishment, a men’s store, a women’s store, an electrical appliance shop, gift shop, grocery store, furniture store, etc. Cocktail bars and liquor stores all across the nation are up for sale.

The cigar business, which some economists in the Department of Agriculture consider a barometer of business conditions,.is off more than ten per cent since the first of the year.

Technological developments that make for future unemployment are coming along fast – a whole new army of machines is advancing upon the employed. There is a’ machine that pops medicine chest drug items into cartons twice as fast as formerly. There’s a machine that coughs up a complete wall for a pre-fab house, in eight minutes ... machinery which permits one labor shift to do the work of two in making giant oil derricks ... electronic restaurant equipment to cook a steak in 60 seconds ... an electronic press for the furniture industry by which a single workman can turn out 16,000 square feet of “core stock” a day whereas under the old method, three men could turn out only about 2,500 square feet a day ... the increasing use of the fork-lift truck and pallet to cut loading and unloading time in freighthouses and warehouses by 40-80 per cent ... a packaging and weighing machine in the California Packing raisin plant which does the work of five women ... a spraying machine in the same company’s orchards which replaces six men ... a new machine for mechanically setting timbers in mines. Operated by two men, it does a job formerly requiring eight. Etc., etc.

Yes, jobs are still plentiful. But the shadow of unemployment is in sight. It is not going to disappear. It is going to grow. It is going to be with us until (a) we reorganize the economy on a socialist basis, or (b) the First Atom War destroys the unemployed and the jobs and the factories. Paste that in your hat.

Notes on the Economy

South African Iron & Steel Industrial Corporation has placed an order for a $25 million steel plant in this country – a slabbing mill, and continuous hot and cold strip mill. Steel production in South Africa currently is around 500,000 tons, about 400,000 tons short of needs. In the next five years, industrialists in that nation plan to spend about $60 millions to expand steel production and ore and coal mining operations. South African ore is said to be among the richest in the world. Apparently, South Africa is one nation which, is going to make the turn toward industrialization, thanks largely to its gold production, which considerably exceeds the value of imports from the U.S. That nation is not pressed for dollars as are England and Canada. American manufacturers of railroad equipment expect to get orders for over $100,000,000 of locomotives, freight and passenger cars in the next few years from South Africa. American manufacturers of cottons, rayons, plastics, and automobiles and trucks, got a real toehold in the; South African market during the war and they intend to keep and expand that market ...

Jack Straus, president of Macy’s store, is the guy who recently came out for lower prices. Macy’s reports higher profits, and the absence of normal markdowns. The company reported net equal to $2.60 a share for the six months ended February 1, 1947, compared with $1.68 for the like period last year. For the 12 months, Macy’s net equaled $5.94 a share, more than twice the $2.53 for the former year. We see what Straus does, we do not hear what he says ...

A small group of Cuban cotton textile manufacturers are seeking to rear a tariff wall behind which they can exploit their home market at the expense of American exporters. Should the Cuban businessmen succeed, U.S. cotton interests are prepared to jump the tariff wall and build their own mills in Cuba. Cuba has always been one of the best textile markets for U.S. mills, until the recent war.

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