Ernest Rice McKinney Archive | ETOL Main Page
From Labor Action, Vol. 7 No. 14, 5 April 1943, pp. 1 & 4.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The latest report of the Senate Truman Committee reveals the fact that industry is repeating the profit-making orgy of the First Imperialist World War. The committee reports that even after the “renegotiation” of war contracts, companies manufacturing war supplies and equipment are being allowed profits of more than 20 per cent.
The reported top profit allowed by the Navy Department is 17.8 per cent. But the War Department is more generous and allows a top profit of 22 per cent.
Determined not to be outdone by the War and Navy Departments, the Maritime Commission permits a top profit of 23.2 per cent. This commission has allowed more than 15 per cent on over half of its renegotiated contracts.
We want to emphasise that these high profits are being allowed after the contracts are “renegotiated”! What must they have been before the process of cutting down on the amount of profit? And what it this “renegotiating” of contracts? It is the carrying out of provisions in an act of Congress that requires the various government departments to make new contracts with manufacturers after a period – and when it is apparent that the original contracts signed were far too high and if allowed to stand would create a public scandal!
Not only this, but “renegotiation” is a ruse to make it appear that the government is cracking down on industry, reducing private profits and making the big corporations toe the mark. It is a nice way to make the Workers believe that the demand of the CIO for “Victory Through Equality of Sacrifice” is being put into effect. The worker sacrifices on wages, meat, shoes and butter. The corporation sacrifices on profits, they are told to reduce their prices to the government: a war is going on and everyone must sacrifice equally.
Of course, the bosses don’t like this “renegotiation” business. They don’t like the act which permits their government prowling around in their private affairs and examining their books. This reduces their opportunity for double bookkeeping, stealing, price fixing pacts and other such pay-triotic practices indulged in by the big industrial and financial patriots.
Furthermore, to have the high per cent of profits exposed retards the anti-labor drives of the bosses. The workers catch them in their BVDs, so to speak, and the halo that surrounds these “industrial statesmen” is changed either into a dunce cap or a money bag.
The bosses would rather the Truman Committee let their profits alone and put in all of its time talking about “absenteeism,” “man hours lost through strikes,” “how the workers are holding up the war effort,” etc., etc. Anything except profits, salaries and dividends. They want 25, 40 and 50 per cent profits. But the government hedges and will meet them half way, the War and Navy Departments and the Maritime Commission will “split the difference.” The boys must be satisfied with a top of around, 17, 22 and 23 per cent!
Now we have to examine how the corporations are faring with this meager average little profit of only 20 per cent. What do the stockholders get, and what about the salaries of the top officials of the big companies producing war materials.
There is U.S. Steel. They sold nearly two billion dollars’ worth to the government last year. This was 18 per cent over 1941 and 38 per cent over the highest year during the First World War. Out of this huge sale to the government this company was able to make a net profit of $71,000,000. In 1941 they made 116 million. They paid out 725 million in wages to a half million workers and officers. But the stockholders were not forgotten. The preferred stockholders got 25 million and the common stockholders got 34 million. Each group got the same amount in 1941. That is, this one corporation paid to stockholders 118 millions in two years.
These millions didn’t go to the men who produce the steel. By far the biggest part of it went to men and women who do no useful labor – to people who just sit and wait for the dividend checks to come rolling-in. Of course, these people claim that they had money to “invest” because they or their forefathers “abstained,” they didn’t spend their substance in riotous living like the average worker or the Prodigal Son. They made a pair of shoes last a little longer; they did with a little less meat; they didn’t eat cake for years and years.
And there is Douglas Aircraft Co. Their net profit in 1942 was $11,000,000, or $18.32 a share. In 1941 the net was $18,000,000 and $30 a share. They say that the payroll of $150,000,000 was fifty times the dividends. This means that dividends were around $3,000,000. Of course it would be interesting to know in the case of U.S. Steel, Douglas and all other corporations just how many people collected these dividends and what share went to each person. This information would reveal some startling things about the bosses and bankers and why they are so anxious not to have profits and salaries exposed. No wonder these fellows have Rickenbacker chasing around the country; talking about what grasping and selfish organizations labor unions are. No wonder the bosses keep the air filled with cries of “absenteeism,” “un-Americanism” and the rest of it.
Not only do the corporations making war supplies want high profits for dividends, they also want to look out for themselves in the matter of salaries. The officers of the Bethlehem Steel Co. understand this thoroughly, Last year this company paid its top officers and directors a total of $2,037,035. There were fifteen of these. Ten of this group received over $100,000.
Eugene Grace, the president, got $537,724! There were eleven smaller fry getting from fifty to a hundred thousand who received a total of $671,334. There were 105 little fellows getting between twenty and fifty thousand, who got a total of $3,008,779. Altogether 126 officers got over five million dollars in salaries!
These are the fellows who talk about “absenteeism,” “our American. Way of Life,” “this is labor’s war” and about increasing the work week.
Of course they want labor to work and sweat and toil like a mule; they want larger salaries, dividends and profits.
Of course they get mad when a harmless little Truman Committee meekly exposes their high per cent of profit and insists that they take a small cut.
The war for these fellows is just one more opportunity to make money. The workers pay terrific income taxes. The government takes part of this money and builds plants for the bosses. The bosses operate the plants and rake in the profits, huge dividends and fabulous salaries. Of course they howl when they are forced to “renegotiate” contracts.
This is the real picture that labor should look at. That is the real situation. When their leaders come around whining about “Victory Through Equality of Sacrifice,” they should point to the profits, the salaries and the dividends.
Who gets the profits out of the war? The bosses are getting theirs now in hard cash. They give up nothing, but continually grab for more.
Labor is told to wait until the war is over and they’ll get democracy.
Right now, however, we get our wages frozen, our hours increased, taxes made more burdensome.
The price of food goes sky high. We get two pounds of meat a week.
How can we permit this state of affairs to go on? What kind of people are these labor leaders who lie on their backs and tell us not to fight back, who say “Yes” to every proposal made by Roosevelt, who wail and moan that if we don’t behave ourselves the stooges of the bosses on Capitol Hill in Washington will pass some “anti-labor” bills?
HOW MUCH LONGER WILL WE ABIDE BY PROMISES MADE BY THESE “LEADERS”?
Ernest Rice McKinney Archive | ETOL Main Page
Last updated: 23 May 2015