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Sam Marcy

The National Defense Lie

The Morgan-DuPont Defense Council Is No Partner
to the American Workers

(17 August 1940)

From Socialist Appeal, Vol. IV No. 33, 17 August 1940, p. 3.
Transcribed & marked up by Einde O’Callaghan for ETOL.

Opportunity, we’ve often heard, knocks only once. For the bankers and industrialists, for the steel kings and motor magnates, for the munitions makers and stock exchange speculators, – for all imperialist vultures who feast on the bloody business called War, – opportunity to coin billions out of human carnage has struck again!

For this, the second time, they have waited for years. They have prepared for it in advance. In their hearts they secretly wished for it, hoped for it. Only in public, before the broad masses of the toiling people, who yearn for peace, who have nothing to gain by imperialist war, do they cloak themselves in the guise of “angels of peace.”

Only production of materials and instruments for war can now lure the bankers and industrialists into investing in industry again. Only production of bombs, shells, cruisers and destroyers can bring back fat profits again. The gearing of the whole economic system to the production of armaments is the one choice now left open to the capitalists whereby they can send idle men back to idle factories; idle billions resting in the coffers of the banks, back into the process of circulation.

The bankers and bosses know this. They have known this ever since the economic collapse of October, 1929. That is why they have contemptuously cast aside every other method proposed to rehabilitate the tottering capitalist system by other means than production for war.

First Hoover attempted to palm off his cynical plan to solve the unemployment problem by urging the unemployed to sell apples on the street corners. Then came tte crack-pot technicrats who urged upon the capitalists a plan to salvage the profits system “scientifically”. Then followed the grandiose schemes of the NRA and the AAA and the mushroom growth of the Townsendites and “Ham ’n’ Eggers”.

For all these schemes and panaceas, the capitalists had only fear and contempt. At most these efforts were calculated to raise the purchasing powers of the millions of starving masses whose incomes were liquidated by the depression; but that could temporarily revive only light industry. The gigantic productive forces which constitute heavy industry remained stagnant through all the years of Roosevelt’s New Deal experiments.

Even powerful shots in the arm like slicing the value of the dollar virtually in half, and the millions of dollars pumped into the W.P.A. construction projects, could not do more than act as a mere temporary short-lived stimulant injected into the corroded and decaying body of capitalism. Only the prospect of large scale armaments, of transforming the country into a titanic factory for the production of the instruments of death could hold out the possibility of high profits on the classical scale.

That is why the so-called National Defense program has been greeted with such enthusiasm by all layers of the capitalist class. That is why the prospect for war orders has been greeted with such applause from the topnotch down to the small-scale manufacturer of khaki suits.

Gone are the days when the capitalist press pictured the Roosevelt government as a “Communist front”. Gone are the days when the New Deal President lashed at the capitalists with the epithet of “economic royalists”.

For now the top-most layers of the economic royalists occupy the mighty seats on the National Defense Commission, the body which has charge of dispensing the billions of dollars for war orders.

Gone are the days when disgustingly hypocritical cartoons depicted the sorrowful figure of the humble tax-payer bearing the brunt of the government’s expenditures for feeding the millions of unemployed. No longer do we see the caricatured figure of F.D.R. priming the pump in an extravagant effort to make his New Deal agencies work. That figure has vanished, and that too, in the very heat of a presidential election campaign. At least the fervent prayer of the upper middle class, “that government and industry should learn to cooperate”, to save the decaying capitalist system, is finding realization.

Now the droves of capitalists and their lobbyists, who are swarming into Washington in order to solicit war orders, greet the War Deal officials with smiles and congratultions.

National Defense Is a Lie to Fool Us

The National Defense Program is the program of the biggest bankers, industrialists and munitions kings. It is their great adventure in plundering the millions of masses under the false and deceptive slogan of National Defense.

The slogan, of National Defense is being paraded more and more by hirelings of the capitalist press, the radio and the movies as the all-national task of one big family, of one large partnership, all striving unselfishly to accomplish one great common end, the defense of the nation against a dangerous outside enemy.

Nothing could be more false! The mask of hypocrisy and deception can easily be torn from the face of the capitalist apologists even by the most cursory examination of the elementary facts involved in the so-called program of National Defense.

Are We Partners with J.P. Morgan?

“You are a partner in the great task of National Defense,” shout the hirelings of the capitalist press to the workers, farmers and poor middle class. Very well then, let us see what this partnership amounts to.

The National Advisory Commission was appointed by Roosevelt to take full charge in executing the program of National Defense. Its chief power lies in the fact that it can purchase and order all the machinery, materials and armaments necessary in the building of the war machine. Thus Edward R. Stettinius, “resigned” head of J.P. Morgan’s U.S. Steel Corporation, is in charge of the production and purchase of raw materials. William S. Knudsen, “furloughed” head of General Motors Corporation, is in charge of production and purchase of all the manufactured goods necessary for the equipment of the armed forces. Ralph G. Budd, a Morgan man who operates many of the railroads controlled by Morgan, is in charge of transportation.

These are the men in whom is vested the full power to dispense the 14 to 25 billions of dollars which will be appropriated by Congress. These men are the very top of America’s Sixty Families, the real rulers of the United States. It will be noticed that these are the men who have the full power to purchase all materials and equipment. The power to purchase is the greatest that can be conferred upon a body which is responsible not to an electorate but merely to the one who appointed them.

The other members of the National Defense Commission are merely advisors, whose powers are extremely restricted if they have any at all. They are: Chester Davis, supposed representative of the farmers, but in reality representative of the big agricultural capitalists; Harriet Elliott and Leon Henderson, “representing” the consumers, whose main task will be to explain the constantly rising cost of living and to demonstrate the utter impossibility of stopping war profiteering. And last but not least, Sidney Hillman to “represent” labor. With regard to his job we shall have occasion to speak later at greater length.

How the Defense Commission Purchases

Now the purchasing of materials and the placing of war orders works in somewhat the following manner. The Defense Commission finds it necessary to order the purchase of 2,000 railroad cars to transport troops and equipment.

The Defense Commission has no power to walk into the offices of the railroad magnates, set a fixed price and command the delivery of the cars within a stipulated period. No, these would be construed to be dictatorial and arbitrary powers and regarded as regimentation of industry.

What really happens when . the defense commission wants to purchase 2,000 cars is as follows; The railroad magnates submit a price. Since the railroads are to ,a very large extent in the hands of a few millionaires such as the Morgans, Vanderbilts, etc., the price is jacked up to a greater extent than it would ordinarily be, since it. is easy to arrive at an agreement among the big railroad magnates who can easily shut out any serious competition.

The price is then submitted to the proper purchasing agent in this particular case Ralph G. Budd.

It would pull a real laugh from anyone who knows the ins and outs of the relationship between the capitalist government and the capitalist class to believe that when Ralph G. Budd in the capacity of an agent of the government, meets his railroad colleagues at the negotiating table, that a real, bona fide sale takes place.

Take the case of a humble munitions manufacturer like DuPont de Nemours. This dynasty has had a complete monopoly even prior to the last war, in the manufacture of gun-powder. This dynasty controls the entire state of Delaware and owns lock, stock and barrel the city of Wilmington and all the suburbs where its munitions plants are located.

Perhaps it has not many friends among the broad masses of people and particularly among its own workers but it certainly can find a warm-hearted friend in the person of J.P. Morgan whose vast holdings in the company are too immense and intricate for us to recount here.

Suffice it to say that E.R. Stettinius, who represents Morgan, will not fail to recognize Morgan’s close relation in the person of the duPonts. The duPonts do not merely dictate their own price for the products, they also ask that the government present them with a gift in the form of new munitions factories, to be paid for by the government and kept by the duPonts after the orders are filled.

They Call It “Amortization”

To camouflage the real character of this merciless plundering and unprecedented pilfering of the people’s pockets, the bankers and bosses have termed these shady transactions “amortization” of plant expansion, “coverage of assumed risks” and other high-sounding but nevertheless, deceptive phraseology.

Such is a rough but mild sketch of the standing of the first partner – the capitalists – in the so-called program of national defense. Now let us turn to the other “partner”, the broad masses of toiling people without whose labor not a wheel can be turned.

(A second article in this series appears next week)

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