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Dwight Macdonald

Sparks in the News

(25 April 1939)

From Socialist Appeal, Vol. III No. 27, 25 April 1939, p. 3.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

That’s Where the Money Goes

They say the United States is a great democracy because our industries are owned by millions of small stockholders, because the American Standard of Living is higher than anywhere else in the world. But the Bureau of Internal Revenue reports that in 1933 only 1,750,000 of the 120,000,000 citizens of this land had incomes high enough to be taxed. And even among these topmost 1,750,000, there was a striking concentration of wealth. Thus of those filing income tax returns in the highly prosperous year 1929, a tiny group of 3.28% got over 83% of all dividends paid out to individual stockholders. Or, to put it slightly differently, 0.3 of 1% of the population received 78% of all dividends paid that year.

What does this tight little oligarchy do with the lion’s share of our national income it receives? A recent issue of Town and Country, an expensive smart-set journal, gives us the answers, as compiled from a questionnaire sent out to several hundred butlers in New York City. Practically all their; employers, replied the butlers, have both town and country houses, the former averaging 18 rooms, the latter 22 rooms. (One family of five had a 44-room house, with 40 servants, or eight to each member of the family.) In the winter, each family entertained an average of 138 guests a month, and in the gay summer season, this rose to 181 guests a month. To keep host and guests happy took an average of 2,400 bottles of various beverages per family in the course of a year, including 242 bottles of Scotch whisky and 115 bottles of champagne. When it all became too utterly boring, the family went off to Bermuda, to the Riviera, to the South Seas – an average of two and one-half trips per year, each time with seven trunks. Town and Country failed to point out that if the 0.3 of 1% of the population whose butlers it queried could only raise the 78% of the national dividends they now get to a reasonable figure – say 9.0% – they could increase their consumption of whisky to 300 or 400 bottles a year and could afford to take four or five trips per year, with, say, ten trunks instead of a measly seven. The New Deal’s tax experts are now working on the problem.

Add: Walter Duranty

A friend sends in a quotation from Martha Dodd’s Through Embassy Eyes which to some extent confirms the hypothesis I advanced last week as to Mr. Duranty’s whereabouts – only the room is in Moscow, not the Bronx. Considering the ardent Stalinist sympathies of Miss Dodd, her testimony is rather damaging.

“When the Moscow trials were beginning,” she writes, “one rather venomous journalist said that Walter never appeared at the sessions, that he sat at home and wrote his news from what he knew would happen and from the information he might have gotten from other sources, while the others sweated every day and far into the night to report the courtroom drama. I faced Walter with these charges, and he admitted them to some degree. He said that he attended sessions regularly but that he did not spend every minute of the day, when they were going on, in the courtroom. He knew all the people involved, most of them personally and over a long period of time, he knew their past records, and he knew the charges against them. It was ridiculous for him to be as attentive as the rest of the correspondents.”

Footnote to Fortune

In the February, 1938, issue of Fortune there was a long and laudatory story on Celotex Corporation, which makes roofing, wallboard, insulating materials, etc. It was a very fine, up-and-coming enterprise indeed, one gathered, and it was run by a couple of supermen named Bror Dahlberg and Wallace Groves. “Both of them,” burbled Fortune, “are men with large ideas, and both like to take chances.” There was, it is true, a very delicate hint in passing that superman Groves “is a source of suspicion and concern to the Securities & Exchange Commission.” But the general impression was that two such splendid specimens of American business manhood as Messrs. Groves and Dahlberg had not been discovered since Fortune’s last corporation article.

This may well be true. But a few weeks after Fortune’s article appeared, its hero, Wallace Groves, was indicted in federal court on fifteen counts of conspiracy and mail fraud. If the case goes against him, as it seems likely it will, he will face a maximum sentence of seventy-two years. Apparently, he took one chance too many.

Fortune’s misstep is understandable. Wallace Groves, like the late J. Donald Coster, is no fly-by-night confidence man. He is one of the big shots in Wall Street, organizer – together with the eminently respectable Walter Mack, Jr. – of the $6,700,000 Phoenix Securities Corp., which controls such nationally known enterprises as Celotex Loft Candy Stores, and United Cigar-Whelan Stores Corp. If such demigods as these turn out to have feet of clay, where will Fortune turn for material?

Right Out of the Horse’s Mouth

“As president of the American Federation of Teachers for the past three years, I can say, with complete assurance that the charges of ‘communist control’ are untrue.” – Jerome Davis, in a recent New Republic. This explicit statement by President Davis, whose long struggle against Stalinism is well known, should set at rest those malicious rumors we have been hearing lately about the teacher’s union. They were evidently the inventions of Trotskyist-Bukharinist-Gestapo elements within the organization.

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