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Jack Ranger

Tapping the Wall St. Wire

“Not With a Bang. But a Whimper”

(8 August 1949)

From Labor Action, Vol. 13 No. 32, 8 August 1949, p. 3.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Each of the factors making for a continuation and a deepening of the depression, which I listed in an article in the New International last spring, is continuing the trend then observed. There is nothing in sight to indicate a lessening, or a reversal, of the economic downslide. The weight of the evidence is all on the other side.

U.S. exports are falling more sharply each month, as the dollar shortage abroad becomes more acute. From the long-range view, the foreign-trade picture is even blacker.

The U.S. synthetic-rubber industry has almost reached the point where it can produce at a price which the natural rubber producers cannot possibly meet. This will deal a terrible blow to Britain, and to British Malaya, which for long has been the richest dollar-earning area in the sterling bloc (with rubber accounting for most of the dollars). Nylon has already dried up the dollar-earning capacity of Japan, and is furnishing one of the substitutes for jute, India’s only great dollar-earning export.

Industrial production declined in June for the seventh consecutive month, being down 3 per cent from May and reaching a three-year low, the Federal Reserve Board reported.

Building and engineering work east of the Rocky Mountains amounted to $4,467,676,000 in the first half of this year, a decline of 6 per cent from the corresponding period of last year.

Corporate profits soar above the general level of increasing misery. Industrial corporations in the first quarter of 1949, numbering 575 companies, showed composite net income 5.3 per cent higher than in the same 1948 period. However, the total was down 12 per cent from the last quarter of 1948.

“Leisurely Descent to Hell”

If government figures of business expenditures for new plant and equipment are correct, one of the most potent forces for recession has not yet become operative. Federal estimates indicate such expenditures for the first quarter at $4.46 billion, against $4.17 billion a year earlier, and for the second quarter at $4.82 billion, identical with the figure for the corresponding 1948 period. If these estimates are correct (they have been questioned by an official of Standard & Poor’s Corporation), then we have experienced a drop in industrial activity from 195 to 169 on the Federal Reserve index, during a period in which capital spending of industry was actually above last year’s levels.

Unemployment continues to erode the economy. It is generally conceded now that there will be 5,000,000 persons out of work by the end of the year. “The thing the economists like best is that the downturn has picked up no momentum since last winter.” declares the N.Y. Journal of Commerce. “They point out that unemployment has been creeping up, not skyrocketing, while unemployment compensation claims have been fairly stable. ‘It is a very leisurely descent; we’re not going to hell in a basket,” says one expert,” states that paper.

Unemployment totaled 3,778,000 in June, according to the census bureau.

In Illinois, claims for unemployment compensation rose nearly 7 per cent in June, almost doubling the number on record in the same month last year. This advance took place despite the discontinuance of benefit payments to nearly 80,000 claimants, many of whom exhausted their wage credits. Claimants in Illinois for jobless pay rose 90,523 during the month, to a total of 247,257 persons.

With so many of the unemployed throughout the country exhausting benefit claims, work-relief programs (absent from the American scene, or sharply restricted, for the past ten years) are returning. Such programs are reported by the American Public Welfare Association to he under way in at least six cities. On May 1, more than 1,156 persons were on work relief in Detroit; 155 in Chicago; more than 300 in Cincinnati; 488 in Los Angeles, 141 in Cleveland; 201 in Milwaukee. The total general relief load for 19 cities Was 165,653 on May 1, an increase of 10,783 since March 1.


Economic Notes

Four major advertisers in 1948 spent on newspaper advertising alone a total of more than $38,000,000. The big four advertisers are: General Motors, $15.2 millions in 1948; Proctor & Gamble, $8.3 millions; Colgate-Palmolive-Peet, $7.9 millions, and Lever Bros., $7.2 millions. Total amount of newspaper advertising by national advertisers in 1948 was $389,261,000, more than double the 1939 total ...

The N.Y. Journal of Commerce is running a delicious series of articles purporting to answer the assertion that 60 families rule this nation, and that “2 per cent of the nation own 90 per cent of the wealth.” The argumentation is on this level: “The answer is to ask: Who owns the radios, the houses, the dresses and suits, the television sets, the automobiles? Who indeed? That 2 per cent would need mighty big closets and garages if the statement were true.” When Lundberg and other, economists documented their assertions concerning America’s 60 ruling families, they were discussing ownership and control of the nation’s means of production. The Journal series never comes to grips with this very touchy point, the heart of the matter.

The government’s cost of living index went up 0.2 per cent in the month ended June 15, largely because of a 0.9 per cent rise in food prices. Rents and fuel prices also rose ...

Great Britain’s international trade conflict climbed to $216,800,000 in June, higher than at any time in the last 21 months. Imports exceeded exports by that amount ...

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