American Business Looks Ahead
MANY TIMES WE HAVE FACED AND SOLVED PROBLEMS OF GREATER IMPORT
By JAMES S. KEMPER, Past President, Chamber of Commerce of the United States
Delivered Before the Twenty-ninth Annual Meeting, April 28, 1941
Vital Speeches of the Day, Vol. VII, pp. 538-541
WE are met at a serious time in the history of our country. This is not unique in our experience as a nation. Many times before we have faced and solved problems of equal or greater import. Our principal difficulty, as I view it, is that in our thinking of what is best for America we are confused by a multitude of conflicting crosscurrents of attitude and viewpoint.
Fundamentally, American objectives are what they always have been. We believe in equality of opportunity; we believe in justice, administered impartially; and we wish to preserve in this country our standards of living and the philosophies of life and government that have made America great.
But, when we get down to the issue of stating specifically what we believe to be best for our people, and how best to realize those things, we immediately find a wide diversity of opinion. That diversity relates less to objectives than to the methods by which objectives best may be attained.
I shall not attempt to explore these divergent views as to the road we should take. I should, however, like to review with you certain aspects of the situation with respect to which it seems to me American business well might concern itself.
Looking back over the years at the national scene, I thinkwe can feel that altogether Americans have done a pretty good job. There are, however, in the picture of today, some cancerous growths upon which the searchlight of public opinion well might be focused.
I should like to discuss for a moment a new disease which is undermining our morale.
What disease is that, you ask? For want of a better name, I'll call it the Non-occupational Disease. I'm not referring now to the well-known shovel-leaners. I am referring to those who have fostered the idea (and usually practiced it, too) that the individual should not concern himself with his future, his place in the sun if you please, but should leave all that to the State. Why bother to accumulate a nest egg to make possible the purchase of a home? Why be concerned about the next payment date on the life insurance policy? Why worry about the funds with which to educate the growing youngsters? The planners make it all quite simple. Inoculate yourself with the Non-occupational Disease and let the State do the worrying. Simple isn't it? No more hard work, long hours, careful planning, frugal living, sacrifice. Gone will be the struggle to get ahead, gone will be the incentive to create, gone will be the satisfaction in a day's work well done.
Instead, what? The State—all powerful—not the creature and servant of the people assuring them of equality of opportunity, justice and the rights inherent to a nation of free men, but the State supreme. The State planning the lives of its citizens, work, play, study—dictating the tasks of old and young alike, providing a so-called social security dispensed as bounty by the State—in short the very sort of life and philosophy some would have us send our sons abroad to suppress.
Loss of Rights
Throughout the world we have witnessed the spectacle of the citizens of democratic nations losing their rights. On every hand, a vast amount of evidence demonstrates the penalty to the citizens which follows each increase of power to the State.
This process has not been confined to Continental Europe. It has been going on in this hemisphere and right here in our own United States of America. It must have been as startling to you as it was to me to read the report of a survey made to the American Youth Commission, which indicated that more than 90 per cent of the youth of America considered that the responsibility for providing them with jobs lay with the government. I don't know what your reaction was, but mine was not one of challenge of the youth. On the contrary, my reaction was definitely that an attitude of this kind, if true, only could be explained by false leadership in our homes, in our communities or in our government.
Extension of Powers
For some years past we have witnessed the gradual extension of the powers of the State, which automatically is a negation of the rights and privileges of the individual. Long before the rearmament program was undertaken we witnessed laws by decree and not by the normal procedures of representative democracy. The label of attempted justification usually has been "Emergency," when it might more properly be called "Political Expediency"—I almost used a stronger term—because I can envision no greater crime, no more far-reaching sabotage against this Republic of free men, than the eventual supremacy of the State, under which it and not the people would be supreme.
At the conclusion of the Constitutional Convention, which brought order out of chaos and a Republic out of a loosely knit federation of independent states, an anxious friend askedBenjamin Franklin, "Well, Mr. Franklin, what kind of a government have you given us?"
Franklin's response was simple and to the point. I commend it to you today as a watchword for the difficult days that lie ahead.
Franklin said: "We have a Republic—if we can keep it." Gentlemen, it is your job and my job to do what we can to keep it.
The subject of my talk with you today is "American Business Looks Ahead." No mariner at sea and no man in business attempts to chart his course without considering the possibility of rough weather that may be encountered. I trust that in what I say, you will not get the impression that I think the picture is all bad, and that the outlook for the future is hopeless. I mention the adverse factors exactly as the mariner studies his barometer that he may guide his ship safely to its destination. And I have a very firm conviction that the ability of the American ship to weather what is ahead will depend upon the intelligent interest, the devotion, the hard work and the sacrifice that leaders of business and industry are willing to give for the general good.
At the moment, of course, our thoughts and our attention and our interest are centered upon the spectre of war abroad and the part we are playing, or may play in it.
In the last year our National situation has undergone one of those sweeping changes that sometimes comes in the life of a nation. Hitherto we have been essentially a nation proud of its traditions, clinging with almost complete devotion to the admonitions of Washington to steer clear of foreign entanglements, and with no jealousy or resentment with respect to the aggrandizements of other countries. Aloofness from the quarrels of the rest of the world has been the lode star of our foreign policy.
Now that policy has been cast aside. The Congress of the United States, as representative of the people, has by the enactment of the so-called Lease-Lend Bill given legislative approval not only to aid to England but to any other country the President may select. There is every indication that the American people favored this legislation. I shall not attempt to analyze the extent to which this support may prove to be inconsistent with their greater opposition to American participation in the war.
But regardless of whether or not the implications of this legislation fully are realized and accepted, the program is now a part of our national policy. It is inseparable, too, from our defense program and so becomes not alone a question of production to meet our defense needs, but to meet the needs of all those to whom the President decides we are to extent aid.
The country has called upon American business and industry to produce; to produce faster, with more ingenuity, and in greater quantities than ever before; and businessmen have responded wholeheartedly and unselfishly. They have performed miracles in the way of preparation, expansion of plant capacity, and in actual production. It also is of the greatest significance and reassurance that they have been able to do this in increasing measure and at the same time have maintained their production of things that people need and can use in their daily peacetime pursuits.
At this point I should like to add a word about priorities. I have no doubt that the very capable men under whose direction questions of priorities will be decided are deeply concerned about, and continuously will give full considerationto, those industries which, as a result of priority rulings, might be forced to close plants that for decades have done a good job for customer, management and labor.
In this we should take a page from the book of Britain. Under the very guns and bombs of Germany, pressed as we certainly are not and never shall be, the British nevertheless are careful not to cripple industry engaged in the production of non-military goods. Particularly they are careful to keep going those industries that are producing for their foreign trade. Let us produce "all out" for our defense program; let us accept priorities and impose substitutes where necessary; but, let us not make the mistake of completely disrupting our economy by an hysterical derangement of our normal production.
At the present time we have gainfully employed in America forty million workers accomplishing 80 billion hours of productive effort. It is estimated that the Defense Program will require 20 billion work hours, that is 25 per cent of our productive effort. We can't have our cake and eat it too; either every employed person in the country must do, on the average, 25 per cent more work, or we must get along without some of the things we now have.
On one phase of the complicated scene there always has been complete unanimity of American opinion. I refer to the need of making our own country impregnable to attack by the completion as soon as possible of our rearmament program. While the strike situation apparently is on the mend, it still is the most serious obstacle to our own military defense. As a result there has developed a strong minority opinion calling for the outlawry of strikes and lockouts. As I see it, such a step would be the worst possible way to deal with the problem.
The vice in attempting to remedy our trouble through a statute, setting up a rigid legislative formula applicable in all cases, resides in the fact that the basic causes and difficulties that produce strikes and lockouts are infinitely various and in most cases the legislative formula won't fit the particular controversy. Compulsory arbitration or the attempt to deal with labor and employer disputes by any form of legislative compulsion never yet has worked satisfactorily. Such methods failed England in the first World War, and both Canadian and Australian experience condemns compulsory arbitration methods on the simple ground that they won't work. The National Defense Mediation Board has made a good beginning and it certainly should be given a fair trial before it is discarded for some untried legislative scheme.
We Americans are an easy-going people, but in a time of peril we will allow no group to stand in the way of Uncle Sam. National rearmament in modern war is a ten-year job which we are trying to telescope into two or three years. It simply can't be done, or even half done, if the flow of production continuously is interrupted by strikes and lockouts. The moral is clear. "Too late and too little," in the way of modern armament, is the epitaph which accurately records the chief reason why thirteen European nations lost their independence. If American labor union officials and representatives of management will tackle every dispute in the spirit of compromise and good will, voluntary mediation will remove the greatest hurdle in our own path to adequate national defense.
In such a time as this, there are not just two parties to a strike or lockout. There are three. The general welfare ofAmerica itself is the third and most important interest in every controversy involving production for national defense. And let every labor union and every employer take note that the general welfare of America must take precedence over every other consideration.
As President Coolidge well said: "There is no right to strike against the public safety by anybody, anywhere, any time."
While I appreciate that national defense is the first order of the day and that suggestions of economy are too likely to be thrust aside at such a time, I wish to say that it is just as perilous to ignore prudence in financing our defense program as it would be not to acquire modern arms and munitions of war.
The businessmen in Washington—familiarly known as $1 a year men—who are giving so much of their time and energy to making America impregnable, made good in their own businesses by watching their cost sheets. They were men whose box record showed they had satisfied customers, improved working conditions, and at the same time had kept their companies solvent. Their presence here should stimulate our government administrators not to overlook the cost sheets of the country.
The federal government alone is entering upon a program of expenditures for all purposes in the next two years of about forty billion dollars. This does not include all of the appropriations, contract authorizations and recommendations which have been made, but relates solely to the expected net expenditures. This tremendous sum is difficult to comprehend. But we can get a fair basis of comparison when we realize that it is one-third more than the entire assets which all the life insurance companies in America have accumulated in one hundred years and more, to protect some hundred million of our people against the day of adversity. And it also is nearly one-third more than all of the accumulated savings deposits of the nation in mutual savings banks, other state banks, trust companies, private banks, national banks, and building and loan associations. It is 60 per cent more than the entire net income of all the individuals and all the corporations making federal tax returns in 1938, the latest year for which official data are available.
Must Pay Price
It must be obvious that the god of modern war wears a crown of gold and we must school ourselves to the unpleasant fact that we can't be well armed and not pay the price. And, since we have decided to be well armed, it is imperative that we begin now to raise the money with a minimum of danger to our normal peace-time economy. As I see it, an increase in current taxes is far preferable to the risk of inflation inherent in a rapidly mounting national debt.
The program of the Treasury to finance the defense expenditure, in part at least, by the sale of bonds to individuals and others rather than the banks, is constructive and should be supported. The unanimous recommendations made in January by the Federal Reserve Board, and concurred in by the other authorities of the Federal Reserve System, should have immediate consideration by the Congress.
No good American will protest the necessary cost of providing adequate national defense. But every American is entitled to know that the money raised by the tremendous mortgage which the federal debt is placing upon his savings will be wisely and conscientiously disbursed.
In November, 1940, the President stated that non-military expenditures would be "cut to the bone," yet the total ofthese items in the new budget was less than 1 per cent below the budget of the previous year ($6,674,000,000, a reduction of but $64,000,000). The Secretary of the Treasury on February 12 of this year urged Congress to examine non-defense expenditures with a magnifying glass in an effort to achieve economies, but so far either Congress or the magnifying glass has failed to work.
The best place to start in putting our financial house in better order is on these non-military expenditures, and I urge all of you in the coming year to cooperate with the Chamber in an effort to get something more helpful than unredeemed promises.
An old friend recently said to me: "But how can you speak of dollars when the world is afire?"
My answer to him and to you is: Adequate national defense does not justify profligacy in the expenditure of public funds. National defense should not be used as a patriotic cloak to hide waste and inefficiency in non-defense expenditures. If the lessons of the past twenty years are of any value, they teach that dictatorships, more than anything else, are receiverships. And, finally, I should answer: The twin children of Mars are death and debt. Death in all its tragedy might under some conditions be preferable to the living horror of life in a country in which the people were mere pawns of a state, which achieved its power through impairment of the federal credit.
I think it is a fair conclusion that by our handling of our internal affairs during this rearmament period, we probably shall be determining the structure of government and life under which we shall live for many years to come. That is why we should, in addition to our tremendous arming effort, give daily thought and real study to our domestic problems.
The very uncertainty of the future makes it obligatory on us to leave no stone unturned to do now, whatever it is possible to do, to cushion the impact on the business of this nation which will follow the withdrawal of the artificial stimulants to trade which now give the patient such a persuasive but deceptive appearance of prosperity.
Our own rearmament program and support of the British war effort are two of the most important props to our present business activity. No one can predict how long this condition will continue.
Because of this, I believe we businessmen should begin at once with detailed and comprehensive programs to discover and develop new sources of business. As I see it, We should proceed on three fronts. Each business should set up its own machinery to study new markets, new products and other avenues for employment. Chambers of commerce and other business organizations should set up committees to work out long range programs so that every community best can utilize its resources and economic assets. Thirdly, all of the technical and research groups in private industry, in the universities and in research associations in cooperation with the federal and state governments should make the subject of employment in the reconstruction period a major current program.
Things to Avoid
In this way, the best brains of the nation could do some effective work before the critical period actually is upon us. By tackling the job now, and getting something constructive ready for action, we probably can escape a lot of crackpot schemes that will come out of hiding when the wholesale need for jobs again becomes acute.
Many students of the situation believe that the post-war world, in America as in England and elsewhere, will witness an intensive drive to establish detailed and comprehensive control by the state of every phase of our economic life. We businessmen must rally to the defense of a free economy. Theodore Roosevelt well stated the case when he said: "No action by the state can do more than supplement the initiative of the individual; and ordinarily the action of the state can do no more than to secure to each individual the chance to show under as favorable conditions as possible the stuff that there is in him."
Many vital questions will be an important part of your deliberations in this annual meeting. There is no easy solution for the difficult and perplexing problems they present. But the task before you is an inspiring and challenging opportunity to perform a great public service. It is my comforting conviction that the business leaders making up this impressive body will prove equal to that challenge.
I am an American. You are Americans. Each of us is proud of his heritage.
Down deep in our natures we have a love for this country that words can not express. I only can say to you that I approach the end of stewardship of this great organization with the sincere conviction that each one of us will dedicate himself unselfishly and wholeheartedly to the preservation of the greatest Nation of all time. I promise you that, as a private in the ranks, I shall not fail to do my humble part.