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Jack Ranger

Tapping the Wall St. Wire

(8 March 1948)

From Labor Action, Vol. 12 No. 10, 8 March 1948, p. 3.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Before commenting on the recent drop in grain prices, I’d like to point out a few more examples of the trend toward RISING PRICES for non-agricultural foods, as cited in my February 16 column. The most important of the increases since then has occurred in steel. Carnegie-Illinois, a subsidiary of U.S. Steel, has advanced its price of semi-finished steel by $4.89 a ton. Other steel-makers quickly followed suit. The increases were made quietly and shiftily. What happened was that the steelmakers announced they were shifting certain price quotations from a gross-ton basis (2,240 pounds) to a net-ton basis (2,000 pounds). With this shift to the lighter ton, prices per ton even actually dropped – the only catch being: that there are 240 fewer pounds to the ton. Adjustments in extra charges brought the average price increase for semi-finished steel to from $7 to $10 a ton. Smaller non-integrated steel firms are expected to boost prices on finished steel. Already, other grades of steel are rising. On February 20 Allegheny Ludlum added $10 a ton to the price of its hot and cold rolled carbon strip. Prices of silicon shoots and strip were raised by $15–$25 a ton.

Everyone knows that a price increase in steel is followed shortly by increases in the prices of durable consumer goods – autos, refrigerators, washers, stoves, etc. Philip Reed, chairman of the board of General Electric, has already been quoted by the Wall Street Journal as saying that “there’s no question but what steel price advances will have some effect on the costs of finished goods ... depending on how much steel goes into the end product.”

Other price increases announced since the February 4 grain market break include newsprint, up $10 a ton; worsted wool fabrics, up 8 per cent to 12 per cent; brick, up $3 a thousand; coach fares on the western railroads, up 14 per cent.

Draw your own conclusions as to whether there appears any hope of a significant drop in living costs in the next few months.

The deep swing in grain prices was a shock to everyone, but most of all to the Truman administration. Despite lip service to lower prices, that is just about the last thing Truman wants, at least until after the elections. It was extremely enlightening to watch the day-by-day attempts of the administration to rally the grain market.

Food prices had hardly begun to slide before Secretary of Agriculture Anderson was hinting that maybe the government might lift its grain export goals and begin buying heavily again by spring. A $570 million program for aid to China was whipped together and announced – $130 millions would be used to buy cereals in the next four months, and $193 millions more for wheat or its equivalent in the early months of 1949 – $150 millions for 750,000 bales of cotton, etc. Then Secretary Anderson issued a “warning” that while the world grain situation had improved, it had not yet caught up with the world’s needs. He predicted that next year the U.S. would have to export about 300,000,000 bushels of wheat and 100,000,000 of coarse grains. He further predicted the government would purchase between 30 and 50,000,000 bushels of new crop wheat next June from the early crop movement.

The anonymous experts in the Agriculture Department let it be known that, not only is the price probably higher than before. “In speaking to housewives,” shrewdly observed the Wall Street Journal editorially, “the agricultural experts were slyly speaking to farmers, too. In effect they are advising farmers not to sell their products at today’s ‘low’ prices – wait awhile and prices will soon be up again.”

It is too early, at this writing, to say definitely whether grain prices will pick up again. Farm produce prices in general have risen much higher in proportion to other commodity prices and at a certain stage an adjustment is going to be made. The prices of grains and livestock and dairy produce are going to fall in relation to steel prices, etc., or it could be that the prices of steel, etc., will rise beyond farm prices.

If grain prices show a substantial rally during the spring months, it would not he unprecedented. The same thing occurred in 1920 and again in 1937. In both cases, the rallies were followed by genuine economic collapses on a broad front.

Poor Won’t Get a Break

The one economic fact that is sure is that an industrial collapse will occur in the United States that will be heard round the world, and will have unimaginable reverberations, both here and abroad,

In the meantime – a union official would have to have a hole in his head as big as a head to drop or softpedal union wage demands merely because the grain market fell off a bit, from the tenth to the eighth story, let us say. The dollar a week or so that the housewife may temporarily save in some cities on food, she will fork over in higher prices an clothing, rent, transportation, hard consumer goods.

It is the commonest of fallacies to believe that the poor can, in some way, get a break under capitalism. We can’t. In periods of depressions, prices are low, but so are wages, for those who are working; in periods of war, jobs are plentiful, wages are “high,” prices and taxes arc higher, few consumer goods are available. In “good times” consumer goods are available, but at prices beyond the pocketbooks of most. Prices of some goods fall, but other prices rise. A general fall in prices brings not good tidings but only heartaches. Because a general fall in prices could only mean the start of a depression that would visit the miseries of unemployment upon millions of families.

A second common fallacy is to assume that the capitalists or their politicians can “cause” or control a break like that in the grain market. I have heard workers conjecture that the drop in grain prices was engineered by big business to take the wind out of the unions’ drive for third-round wage increases. This is untrue, friends. Big business cannot “control” the market, for more than a few days. Government, even the most powerful in the world, with a world relief program to manipulate, cannot “revive” the market, either, for more than a brief period. Remember how Roosevelt sought to bring back prosperity – and utterly failed.

To assume that the capitalists or their political agents can control capitalism is to give them much too much credit. They cannot. It is an anarchical system, and cannot be harnessed to plans. That is why it must be succeeded by socialism which CAN PLAN FOR HUMANITY.

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