Carlos Hudson Archive | Trotskyist Writers Index | ETOL Main Page
From Labor Action, Vol. 12 No. 9, 1 March 1948, p. 3.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The brokers, the Wall Street letter writers, the financial commentators cannot understand it. They shake their heads and mutter to themselves. There are precious stones glittering up from the sidewalks at the base of the canyons in Wall Street and LaSalle Street: – and no one stoops to pick them up.
The diamonds are the current prices of the stocks in American enterprise. They are the richly-embossed certificates that epitomize private enterprise in the fortress of world capitalism. The various industrial enterprises which issued the stocks are coining money as they never before have in all history. The stocks are paying phenomenal dividends. The financial reserves behind the stocks are stupendous. Behind the stocks are billions of dollars of wealth, all the so-very-wonderful “know how” of the go-getting capitalists, an Army and Navy that span the earth and command the air over the earth, an imperial government in Washington that stands at the peak of its power, dominating the modern world to a greater degree than did Rome in its grandeur the small world of yesteryear. People won’t buy its stocks. Why?
Once upon a time, in the days between the two world wars, the speculators and brokers and other honest businessmen thought stocks were worth buying if they sold at no more than ten times their annual earnings. But look! Today there are stocks, good stocks, in famous companies, selling at no more than five – or four – or three, or even two times their annual earnings. Still no one buys.
Here is Glidden, purveyor of paint and soybeans, earning $7.67 a year, selling at only 23½ – Lukens Steel, earning $8.92, selling at 22¾ – American Smelting, earning $12, selling at 51½ – nice substantial share of Goodyear Tire, earning $12, selling at 42 – the king of all the trusts, U. S. Steel, earning $12.50 and selling at less than six times that amount, 73½.
Perhaps you are avid for yet greater returns on your investment. Take the plunge with the packing trust. You know how meat prices are. Here’s Cudahy earning a rich $4.32 on a share you can pick up for about $12; and Armour, earning $4.85 and selling for 133/8.
Does the sugar market interest you? Here’s Cuban-Atlantic Sugar, selling for only 18½ and earning $10.68. Double your money in 21 months on that one. Cuban-American is almost as good, earning $6.13 on a 13¾ price.
For a red-hot daily special, there is, Botany Mills. Botany earned $16.50 in 1947 on a share of stock that sells for only 22. Why, you could almost get back your investment on Botany in a year, and still have the stock.
WHY DON’T YOU DO IT?
Don’t you want to get out of the working class and be a capitalist. Here’s your chance. Red-hot tips from Ranger’s dope sheet. You’re entitled to something substantial on the dollar you pay for a year of Labor Action. Invest $1,000 today, and then in ten years, retire. Tell the foreman to go way back and sit down. Go to sunny California with your family and relax in the sunshine. Travel round the world. Be in the big money.
Go on. You can’t lose. Why, Truman’s economic advisers have given us a glimpse of the nice, cozy life in the good old U.S.A. ten years hence. Surely you believe the President of the United States. There’ll be exactly 64,000,000 jobs. People will spend at a rate more than 25 per cent above the present. There’ll be a third more goods and services. Cities and highways will have been rebuilt. There’ll be TVA’s on the Columbia, St. Lawrence, Missouri rivers. New schools. A million new houses a year. The steel industry will have expanded 20 per cent, the petroleum industry, 50 per cent.
Perhaps you are one of those tough-minded people who doesn’t believe it all. Too bad, my friend, you’re missing out on a good thing.
But then, there must be people who believe in the future of American capitalism. Philip Murray, for instance. He insists that the workers support one of capitalism’s candidates. William Green, and Dan Tobin, and A.F. Whitney must believe, for they all tell the rest of us to vote for Truman. Hutcheson of the Carpenters Union must, too, because he assures the workers that the other old capitalist party has a rosy future in store for us. And unlike you, perhaps, these men have p-1-e-n-t-y of money. They all make twenty grand or more a year. Why don’t THEY pick up stocks at these bargain-basement prices? Or why doesn’t James Burnham? There’s a man with faith in the future of American capitalism. Or Henry Wallace? Wallace clears over $50,000 a year on his corn processing plant, he is a capitalist, he has dough to spare, and he says the system has a future. Right now, he says the future may not be as rosy under Harry as it would be under Henry, but still he says it has a future.
Their actions give the lie to their words. Not a one of them believes in the future of capitalism. NOT ONE. Not the brokers, the financial commentators, the labor lieutenants of capitalism, the politicians of capitalism, the money hoarders. They wouldn’t give you a plugged nickel that the system would be anything at all worth living in EVEN FIVE YEARS FROM NOW. Because if they did have the faith in their hearts, they’d be picking up those stocks in a hurry. And stock prices would be up to “normal,” where they were between the two great wars.
You and I aren’t the only ones who see this and say this. In the February 2 Time, Thomas W. Phelps, a partner in Francis I. duPont & Co., a commanding figure in Wall Street, says it: “Many Americans, despite their dislike of Communism,” he says, “lack enough faith in capitalism to risk their money on its ability to produce sustained prosperity. Many others ... lack not faith but cash to buy stocks after paying record high taxes and living costs.”
The rich haven’t the faith. The scissorbills haven’t the cash.
Time quoted another expert as confessing he is “baffled.”
J.A. Livingston, writing his Washington business column in the Chicago Daily News, says “it’s the kind of problem that makes you stop, think and shake your head.”
The poor stock market can’t get anywhere, not even in the wake of all the fine, flowery New Year’s forecasts for 1948, he says. The news can’t explain it, he says. There was a fine earnings report by U.S. Steel, he says. There were individual increases, stock splitting, he says.
Yes, it should make every one of us stop and think.
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Last updated: 23 December 2015