WAR IS A RACKET (Originally published by Round Table Press, Inc. New York, 1935)
CHAPTER ONE. War is a Racket
23 “WAR is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.
A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small “inside” group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.”
CHAPTER TWO. Who Makes the Profits?
27 – 31 “Take our friends the du Ponts, the powder people — didn’t one of them testify before a Senate committee recently that their powder won the war? Or saved the world for democracy? Or something? How did they do in the war? They were a patriotic corporation. Well, the average earnings of the du Ponts for the period 1910 to 1914 were $6,000,000 a year. It wasn’t much, but the du Ponts managed to get along on it. Now let’s look at their average yearly profit during the war years, 1914 to 1918. Fifty-eight million dollars a year profit we find! Nearly ten times that of normal times, and the profits of normal times were pretty good. An increase in profits of more than 950 per cent.
Take one of our little steel companies that patriotically shunted aside the making of rails and girders and bridges to manufacture war materials. Well, their 1910-1914 yearly earnings averaged $6,000,000. Then came the war. And, like loyal citizens, Bethlehem Steel promptly turned to munitions making. Did their profits jump — or did they let Uncle Sam in for a bargain? Well, their 1914-1918 average was $49,000,000 a year!
Or, let’s take United States Steel. The normal earnings during the five-year period prior to the war were $105,000,000 a year. Not bad. Then along came the war and up went the profits. The average yearly profit for the period 1914-1918 was $240,000,000. Not bad.
[…] Anaconda, for instance. Average yearly earnings during the pre-war years 1910-1914 of $10,000,000. During the war years 1914-1918 profits leaped to $34,000,000 per year.
Or Utah Copper. Average of $5,000,000 per year during the 1910-1914 period. Jumped to an average of $21,000,000 yearly profits for the war period.
[… 28-29-30] For the three-year period before the war the total profits of Central Leather Company were $3,500,000. That was approximately $1,167,000 a year. Well, in 1916 Central Leather returned a profit of $15,000,000, a small increase of 1,100 per cent. That’s all. The General Chemical Company averaged a profit for the three years before the war of a little over $800,000 a year. Came the war, and the profits jumped to $12,000,000. a leap of 1,400 per cent.
International Nickel Company — and you can’t have a war without nickel — showed an increase in profits from a mere average of $4,000,000 a year to $73,000,000 yearly. Not bad? An increase of more than 1,700 per cent.
American Sugar Refining Company averaged $2,000,000 a year for the three years before the war. In 1916 a profit of $6,000,000 was recorded.
Listen to Senate Document No. 259. The Sixty-Fifth Congress, reporting on corporate earnings and government revenues. Considering the profits of 122 meat packers, 153 cotton manufacturers, 299 garment makers, 49 steel plants, and 340 coal producers during the war. Profits under 25 per cent were exceptional. For instance the coal companies made between 100 per cent and 7,856 per cent on their capital stock during the war. The Chicago packers doubled and tripled their earnings.
And let us not forget the bankers who financed the great war. If anyone had the cream of the profits it was the bankers. Being partnerships rather than incorporated organizations, they do not have to report to stockholders. And their profits were as secret as they were immense. How the bankers made their millions and their billions I do not know, because those little secrets never become public — even before a Senate investigatory body.
But here’s how some of the other patriotic industrialists and speculators chiseled their way into war profits.
Take the shoe people. They like war. It brings business with abnormal profits. They made huge profits on sales abroad to our allies. Perhaps, like the munitions manufacturers and armament makers, they also sold to the enemy. For a dollar is a dollar whether it comes from Germany or from France. But they did well by Uncle Sam too. For instance, they sold Uncle Sam 35,000,000 pairs of hobnailed service shoes. There were 4,000,000 soldiers. Eight pairs, and more, to a soldier. My regiment during the war had only one pair to a soldier. Some of these shoes probably are still in existence. They were good shoes. But when the war was over Uncle Sam has a matter of 25,000,000 pairs left over. Bought — and paid for. Profits recorded and pocketed.
[…] Airplane and engine manufacturers felt they, too, should get their just profits out of this war. Why not? Everybody else was getting theirs. So $1,000,000,000 — count them if you live long enough — was spent by Uncle Sam in building airplane engines that never left the ground! Not one plane, or motor, out of the billion dollars worth ordered, ever got into a battle in France. Just the same the manufacturers made their little profit of 30, 100, or perhaps 300 per cent.
Undershirts for soldiers cost 14¢ [cents] to make and uncle Sam paid 30¢ to 40¢ each for them — a nice little profit for the undershirt manufacturer. And the stocking manufacturer and the uniform manufacturers and the cap manufacturers and the steel helmet manufacturers — all got theirs.
[… 31] The shipbuilders felt they should come in on some of it, too. They built a lot of ships that made a lot of profit. More than $3,000,000,000 worth. Some of the ships were all right. But $635,000,000 worth of them were made of wood and wouldn’t float! The seams opened up — and they sank. We paid for them, though. And somebody pocketed the profits.
It has been estimated by statisticians and economists and researchers that the war cost your Uncle Sam $52,000,000,000. Of this sum, $39,000,000,000 was expended in the actual war itself. This expenditure yielded $16,000,000,000 in profits. That is how the 21,000 billionaires and millionaires got that way. This $16,000,000,000 profits is not to be sneezed at. It is quite a tidy sum. And it went to a very few.”
CHAPTER THREE. Who Pays the Bills?
36 “[the soldier] was virtually blackjacked into paying for his own ammunition, clothing, and food by being made to buy Liberty Bonds. Most soldiers got no money at all on pay days.
We made them buy Liberty Bonds at $100 and then we bought them back — when they came back from the war and couldn’t find work — at $84 and $86. And the soldiers bought about $2,000,000,000 worth of these bonds!”
CHAPTER FOUR. How to Smash this Racket!
39 – 40 “The only way to smash this racket is to conscript capital and industry and labor before the nations manhood can be conscripted. One month before the Government can conscript the young men of the nation — it must conscript capital and industry and labor. Let the officers and the directors and the high-powered executives of our armament factories and our munitions makers and our shipbuilders and our airplane builders and the manufacturers of all the other things that provide profit in war time as well as the bankers and the speculators, be conscripted — to get $30 a month, the same wage as the lads in the trenches get.
Let the workers in these plants get the same wages — all the workers, all presidents, all executives, all directors, all managers, all bankers — yes, and all generals and all admirals and all officers and all politicians and all government office holders — everyone in the nation be restricted to a total monthly income not to exceed that paid to the soldier in the trenches!
[… 40] Give capital and industry and labor thirty days to think it over and you will find, by that time, there will be no war. That will smash the war racket — that and nothing else.”
40 “Only those who would be called upon to risk their lives for their country should have the privilege of voting to determine whether the nation should go to war.”
41 “The ships of our navy, it can be seen, should be specifically limited, by law, to within 200 miles of our coastline. […] Two hundred miles is ample, in the opinion of experts, for defense purposes. Our nation cannot start an offensive war if its ships can’t go further than 200 miles from the coastline. Planes might be permitted to go as far as 500 miles from the coast for purposes of reconnaissance. And the army should never leave the territorial limits of our nation.”
42 “Three steps must be taken to smash the war racket.
1. We must take the profit out of war.
2. We must permit the youth of the land who would bear arms to decide whether or not there should be war.
3. We must limit our military forces to home defense purposes.”
AMENDMENT FOR PEACE (Originally printed in Woman’s Home Companion, September, 1936.)
61 “I PROPOSE an Amendment for Peace, to the Constitution of the United States:
1. The removal of the members of the land armed forces from within the continental limits of the United States and the Panama Canal Zone for any cause whatsoever is prohibited.
2. The vessels of the United States Navy, or of the other branches of the armed service, are hereby prohibited from steaming, for any reason whatsoever except on an errand of mercy, more than five hundred miles from our coast.
3. Aircraft of the Army, Navy and Marine Corps are hereby prohibited from flying, for any reason whatsoever, more than seven hundred and fifty miles beyond the coast of the United States.”
63 – 64 “The Philippine Islands are now on their way to independence. They are not a defense necessity; commercially they are a liability; it is virtually impossible to defend them adequately. We should let them go. A bill to give Puerto Rico its independence has been introduced in Congress; we should let it go. The Virgin Islands, Guam, American Samoa, Wake and the Midway Islands are not indispensable to our national life. While American capital is invested in each instance, it would have to take its chances, just as in all external investments. The balance of trade is against the United States in all these dependencies—we buy more from each of them than we sell to them. They are not assets.
Hawaii and Alaska are our own territories: we cannot set them loose. It is virtually impossible, from a military or naval standpoint, to defend them properly except at prohibitive cost, so I believe our defense of these territories would have to be by economic pressure. We would move the naval station and the huge military detachment from the Hawaiian Islands and such forces as we have in Alaska but we would announce to the world that these are ours and that they are not to be touched: that while we will not go abroad to fight for them, we will exact every possible economic pressure against any power which might be tempted to take these possessions. And the United States is so situated that it can successfully exert economic sanctions.
That leaves the Panama Canal Zone. The Canal is essential to our defense. We must defend it. Any notion which would attempt to block, damage or destroy the canal would do so only as a prelude to a war upon our people. We would defend it as we would any part of our coast.”