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Dwight Macdonald

Sparks in the News

(10 November 1939)

From Socialist Appeal, Vol. III No. 86, 10 November 1939, p. 4.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

The Color Line in Culture

Waite Phillips is a Tulsa, Oklahoma, oil magnate – an “oiligarch,” in Time’s vocabulary. Mr. Phillips, a great public benefactor of Tulsa, recently turned over his big Italian-style mansion to be used as an Art Center. The other day the Art Center had its grand opening. Every one in Tulsa was there, except those whose skins happened to be black. Their presence was most distinctly not requested. But the Tulsa oiligarchs are broad-minded. They recognize that it would be unjust to exclude the city’s Negroes from the cultural advantages of the Art Center. Therefore, according to Time for November 6: “One Thursday a month will be set aside as Jim Crow day at the Art Center.”

Blood Money

Bourgeois economists lament the disappearance of the economic frontier in American capitalism. But there does exist one last great economic frontier for world capitalism, one remaining major market for the consumption of manufactured goods – a frontier which is at present located between the Westwall and the Maginot Line. The bombing plane, furthermore, has extended the range of this sort of “consumption'’ from the actual battlefields to the whole of Europe. The beauty of air raids on industrial centers, from an economic point of view, is that not only are large quantities of those expensive and complicated mechanisms called bombs used up, but that their consumption destroys even vaster amounts of other machines and commodities on the ground. Thus is created a double-barrelled market for goods: to replace those destroyed, and to destroy still others.

Merely on the strength of such rosy prospects, our own capitalist system in the last few months has taken a new lease on life. The N.Y. Times weekly index of business activity has risen from 92.3 of “normal” in the week ending August 26 last to 104.7 in the week ending October 28. Secretary of Commerce Hopkins has reported that the national income was 550,800,000,000 in the first nine months of this year, as against $48,700,000,000 in the same period last year. The American Federation of Labor, in its monthly business survey, states that since the war crisis began to sharpen at the beginning of August, about one million and a quarter American workers have found jobs.

The New Deal has been administering to American capitalism various reformist “shots in the arm” for the last seven years. But all sections of bourgeois opinion, from the AFL bureaucracy to the big business press, agree that the outbreak of the war has done more for American business than anything ever pulled out of the hat by Roosevelt and his brain trusters. This is flatly stated by the AFL business survey, and it is editorially echoed by the N.Y. Times, chief newspaper voice of big business. "Much as one may deplore a business boom arising out of the tragedy of war,” writes the Times in its usual sanctimonious style, “it is significant that the mere expectation of war demand has done more for recovery than our actual Government spending program.”

Great Expectations

But it is also significant – and a little worrying – that so far the whole war boom has been based on nothing but expectations. The September merchandise exports of the United States were 17% higher than they were in the same month last year. But this increase was not to any great extent in war goods: over a third of it was in cotton, shipped under the subsidy plan, and the rest was largely other agricultural products. The war demand hasn’t yet materialized. Steel production has gone up to over 90% of capacity, and more steel is now being produced per week than ever before in our history. But this is all based on the expectation of future war orders. And if the war fails to become "serious” in the next few months, or if, even worse, some sort of peace is patched up, then American business will find itself far out on a limb.

The Continental Steel Corporation recently announced that it was setting aside in a special fund the equivalent of two-months’ earnings as a “reserve for contingencies.” The “contingency” it stated in these frank terms: “The war in Europe, together with a domestic business improvement, has brought about an inflationary condition that could be rapidly reversed if peace negotiations were effected.” Or, in plain language, peace would be a disastrous blow to the Continental Steel Corporation, as to other American corporations.

The First Swallow

Already the first swallow of spring has arrived, a harbinger of the fertile summertime in store for American capitalism if only the war doesn’t peter out. This is the repeal of the Embargo. Writing in last Sunday’s Times, Arthur Krock realistically summarized its significance:

“The majority in Congress was persuaded that repeal of the arms embargo was desirable for two purposes – to remove the disadvantage it imposed on Great Britain and France in fighting Germany, and to set up an industrial war machine in the United States in the interest of national security.”

As to the first point, it is reported that the aviation industry has already received from the Allies $170,000,000 worth of plane orders. England is about to launch a $1,000,000,000 war loan drive among its citizens, the proceeds from which will mainly go for the purchase of American munitions. Washington officials estimate that in the next few weeks the Allies will place over here war orders totalling $500,000,000, and in the next eight months $2,000,000,000.

Krock’s point about repeal making it possible to build up, before the United States enters the war, a big native munitions industry has also received factual confirmation in the last few days President Roosevelt has personally urged that a steel-producing center be established on the Pacific Coast to turn out armaments. Also, the French Government has announced that it is lending $5,000,000 to two American airplane manufacturers so that they can expand their plants sufficiently to produce the huge number of planes France will need. Thus Allied capital will be used to help finance the expansion of our industrial war machine. This is what American “neutrality” means in the present war.

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