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World War II and the Monopolies

Big Business Grows Bigger

(20 July 1946)

From The Militant, Vol. X No. 29, 20 July 1946, p. 6.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

World War II didn’t bring the promised “four freedoms.” It didn’t bring lasting peace, plenty and security. But it did make American Big Business bigger. It did increase the concentration of wealth and economic power in the hands of the giant monopolies.

These monopolies – owning most of America’s industries, transport, raw materials, food processing and distribution, financial institutions – are controlled by a tiny oligarchy of America’s sixty richest families. They own most of this country. They rule it. And it is their armed forces and economic penetration which are reaching out to rule the whole world too.

How much of this country this ruling oligarchy owns and how much they have increased their ownership and control through World War II, is the subject of a recently-published report prepared for the Senate Small Business Committee by the Smaller War Plants Corporation (SWPC), entitled Economic Concentration In World War II.

Packed into the 358 pages of this report are facts which confirm to the hilt the contentions of The Militant and the Socialist Workers Party that the war was inspired by and benefitted only Big Business.

“Economic Royalists” Get Fatter

Roosevelt, at the start of his presidential career in 1933, promised to “drive the money-changers from the temple” and assailed the “economic royalists.” But, as the conclusive evidence of this Senate report shows, the “economic royalists” fattened during his peacetime regime and during his wartime rule grew to unprecedented wealth and power.

“The relative importance of big business particularly the giant corporations, increased sharply during the war, while the position of small business declined,” the report demonstrates.

In September 1939, start of World War II, the value of all usable production facilities in the United States was about 40 billion dollars.

BUT – just 250 of the largest corporations had 25.9 billion dollars of these capital assets – 65.7 per cent!

During the war, 26 billion dollars of production facilities were added – two-thirds from the pockets of the American people by way of the U.S. Treasury. Of these facilities, says the report, “about $20,000,000,000 of the $26,000,000,000 wartime plant is usable for the production of peacetime products either immediately or after only minor conversion.” Thus, there is today “a total of some 60 billion dollars of postwar usable facilities.”

“Who then controls this vast productive plant?” asks the report. “The answer to these questions may be obtained by examining the holdings of the Nation’s 250 largest manufacturing companies – 31 of which are controlled by five financial interests groups.

The Point of Free Enterprise

“If these 250 industrial giants finally acquire the 8.9 billion dollars of usable federally financed facilities on which they generally hold purchase options, their facility holdings will come to 38.5 billion dollars, 66.5 per cent of total usable facilities and almost as much as the entire 39.6 billion dollars held before the war by all of the more than 75,000 manufacturing corporations in existence.”


But that isn’t all. Just 31 of these corporations own a total of 18.2 billion dollars of facilities – 30 per cent of the nation’s productive plant and equipment. AND FIVE FINANCIAL GROUPS, “NAMELY, MORGAN-FIRST NATIONAL, MELLON, ROCKEFELLER, DU FONT, AND THE CLEVELAND GROUP,” OWN THESE 31 CORPORATIONS.

The direction in which Big Business has been heading – aided by two bonanza world wars – are shown by other illuminating figures.

Corporations with manufacturing assets of more than $50,000,000 each – “the giants of industry” as the report calls them – in 1934 controlled 37 per cent of all such assets in the country. By 1940, these “economic royalists” controlled 44 per cent. In 1942, blessed by war, these 205 corporations owned 49 per cent of all corporate manufacturing assets.

The bigger the corporations, the increasingly bigger proportion of all profits gravy they have been lapping up. The report states:

“The largest income recipients – those receiving $5,000,000 annual net income and over – have grown steadily in importance. For example, in 1918 they accounted for 34.2 per cent of the total net income received by all manufacturing corporations. During the depression the largest income recipients declined in importance. SINCE 1934, HOWEVER, THE LARGEST INCOME RECIPIENTS HAVE INCREASED THEIR POSITION, AND IN 1942, THE CORPORATIONS WITH $5,000,000 AND MORE ANNUAL NET INCOME ACCOUNTED FOR 50.7 PER CENT OF THE TOTAL.” (Our emphasis)

Own 49 Per Cent of Assets

By contrast, the small businessmen, those whom Roosevelt and Truman after him promised to save, are being forced more and more to the wall. “The smallest income recipients – those with annual net income of less than $250,000 – have shown a decrease in importance over the years. In 1918, this group received 23.4 per cent of the total net income of all manufacturers corporations. Their proportionate share had decreased to 19.1 per cent in 1929 ... and by 1942 their share had decreased to only 11.6 per cent.”

The only group which improved its relative position in the economy as a whole consisted of the largest firms, with 1,000 or more employes. In 1939, these firms employed 30 per cent of all wage earners. “By 1943, these figures had risen to 44 per cent.”

But those “few giants” employing 10,000 or more, “accounted for 13 per cent of total employment in 1939, and for fully 31 per cent of the total in 1944.”

Thus the war gave the big monopolies not only a greater share of the wealth and productive facilities – it gave them an immeasurably greater direct control over the lives of the working people.

Deadly Blow at “Little Man”

At the same time, the war struck a deadly blow at the little business men.

“The record of the war years shows a constant increase in the importance of big business and a constant decline in that of the little concerns. This was due, in part, to the COMPLETE DISAPPEARANCE OF HALF A MILLION SMALL RETAIL, SERVICE, AND CONSTRUCTION FIRMS.” (Our emphasis)

The same tiny gang who owned most of America and ruled it in 1919 and 1939, own more of it today.

Only 10,000 persons (0.008 per cent of the population) owned one-fourth, and 75,000 (0.06 per cent of the population) owned one-half of all corporate stock in 1939i

The top one per cent of shareholders owned 60 per cent of the outstanding stock of the 200 largest non-financial corporations.

Just eight families and interlocked financial groups – including the Morgans, Mellons. Rockefellers, Du Ponts and Kuhn-Loeb – controlled outright 106 of the 250 largest corporations and two-thirds of their combined assets.

They are the ones who own most of America. The war was good to them.

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