The Post War Outlook for Young Business Men
"ETERNAL VIGILANCE IS THE PRICE OF LIBERTY"
By DeWITT EMERY, President, National Small Business Mens Association, Inc.
Delivered before the Annual Meeting of the United States Junior Chamber of Commerce,Chicago, Ill., June 14, 1943.
Vital Speeches of the Day, Vol. IX, pp. 563-566.
WHAT is the Post War Outlook for Young Business men? The only way I can truthfully answer! that question is by saying, "I don't know." However, based on a projection into the post-war period of the rapidly expanding pre-war centralized control, I'd say that the post-war outlook for young business men is bad, very bad. In fact, worse than it has ever been at any given time in the entire history of our Republic.
About all a young business man can look forward to under the centralized control philosophy is more and more, and then still more, regimentation in every phase of his existence. It recently came to light that under the termsof the lease used by at least one of the government housing projects, it's necessary for the tenant to get written permission from the government before having a baby. When regimentation reaches that stage, all of the other things, such as being told by the government what to eat and how much, what you may or may not wear, where you have to live, where you must work and for how much, whether or not you can have a car and if so, how many miles you are permitted to drive it in a given period, all these things and many others fall into the class of minor irritants.
Under centralized, if a young business man should be foolish enough to want to go into business for himself,he'd undoubtedly have to get the approval of from five to twenty-five bureaucrats. And if he did, finally, succeed in getting permission to go ahead, his troubles would only be beginning. He would unquestionably have to hire his help through a government employment office and pay a scale of wages fixed by a bureaucrat. He'd only be allowed so much of certain materials, all of which he'd have to account for to four or five different departments, bureaus or agencies, on literally hundreds of different forms. He'd only be allowed to make sales in a certain definitely defined territory at prices fixed by order or decree.
If at any time he was inclined to show a little independence and exercise some initiative, he'd more likely than not be sat upon by a bureaucrat and should he at any time on anything fail to go along with everything his bosses, the bureaucrats, wanted, he'd probably be put out of business overnight by having his materials shut off, his employees assigned to other jobs and his customers forbidden to buy from him.
That isn't a very pretty picture is it? But, of course, there would be compensations. Yet, indeed. In return for giving up his liberties and being a slave of the state, he'd be promised security from the cradle to the grave. What more can anyone ask. Security provided by the government from the cradle to the grave, according to the "planners", is all there is. There ain't no more.
Some of you may think that I'm overdrawing this picture of centralization. That the sort of thing I'm talking about just can't happen here. You may feel that I'm just a plain, everyday, ordinary, reactionary calamity howler. However, before you reach such a conclusion, let's follow the advice of our "Brown Derbied" friend and "look at the record."
In looking at the record, please keep in mind that we are only taking a hasty glance. Were we to take an all-inclusive look, we'd have to stay right here until at least this time next week. Also keep in mind, while we are looking at the record, that from almost the very inception of our Republic the Federal Government has been growing in power, thereby becoming an ever increasingly important factor in our national life. Up until recent years the expansion was very gradual, its largest single impetus prior to 1933 being, perhaps, the income tax amendment which went into effect in 1913. An interesting side light on this is that when the income tax amendment was being considered on the floor of the Senate, one senator said he was opposed to it because he felt such a tax would get bigger and bigger until some day it might amount to as much as five or ten percent.
I'd like to trace for you the development of the power of the Federal Government during the period of its gradual expansion, but I'm afraid we won't have time for that. And further, for our present purpose, the recent rapid expansion in this power is more important.
I want you to keep in mind that the glance we are about to take at the record is the pre-war record. Suppose we start our glance with the bank holiday in 1933 which closed every bank in the country and before any bank could reopen it had to have permission from the government to do so. In many cases, the reopened bank had the government as a partner because of the funds advanced by an agency of the government. From that day to this, banks and bankers have been anything but free agents. In fact, one of my banker friends told me recently that it has now gotten to the point where it is necessary for him to get permission from an official of the government before he can wash his hands during business hours.
Following the bank holiday came a perfect deluge of new Federal agencies, some of them created by law, others
by executive order. Among these new agencies we find the following, which I'll name in alphabetical order rather than by the dates they were established:
Agricultural Adjustment Administration
Civil Aeronautics Authority
Civilian Conservation Corps
Farm Credit Administration
Federal Communications Commission
Federal Deposit Insurance Corporation
Federal Housing Administration
Federal Savings and Loan Association
Federal Security Agency
Federal Works Agency
Government Relations and Science Advisory Committee
National Defense Advisory Commission
National Labor Relations Board
National Railroad Retirement Board
Public Works Administration
Railroad Retirement Board
R. F. C. Mortgage Company
Rural Electrification Administration
Rural Rehabilitation Division
Securities Exchange Commission
Social Security Board
Tennessee Valley Associated Co-operatives
Tennessee Valley Authority
Temporary National Economic Committee
United States Employment Service
United States Maritime Commission
Wage Hour Division
Works Progress Administration
I have named thirty out of a total of one hundred twenty-four agencies of the government created between March 4th, 1933, and May 1st, 1940. I won't take time to give you the names of the other ninety-four. I have here the complete list of one hundred twenty-four if any of you care to look it over. Some day I'll extend the list to include all of the new agencies created since May 1st, 1940, but don't believe I'd better undertake that until the paper shortage has been licked.
Each of the thirty agencies I named, and each of the ninety-four I didn't name, issued rules or regulation of some kind. Some of them issued a large number and some comparatively few, but the sum total of the regulation applied by these one hundred twenty-four new agencies of the government adds up to a sizable chunk of pre-war regimentation—yes, quite a sizable chunk. And that's the point I want to make, particularly for the benefit of the "it can't happen here" boys.
I'd like to comment on several of these agencies but we haven't time for that. Therefore, we'll pass up all of them except A.A.A. and we'll talk a little about it because the record of the operation of the farm program under A.A.A. furnishes what might almost be called perfect data for the next point I want to make.
You undoubtedly remember that the A.A.A. was brought into existence to save the farmer. It provided an over-all plan for farmers to replace the then haphazard method whereby each farmer decided for himself what he'd raise and how much. Quotas were fixed for several crops. Surplus were to be eliminated and above all, prices were to be raised and the farmers' income greatly increased. Over the period of five years which we shall consider, several billion dollars of the tax payers' money was poured intothe farm program. What was the result? Here are some of the figures. Those on prices were compiled from the official record of the Department of Agriculture and those on imports, from the official records of the Department of Commerce.
The average price of wheat 1921 through 1932—before planned economy—was 1.017 per bushel. The average price of wheat 1933 through 1937—during planned economy—was 85 1/2 cents per bushel, a decline of 16.2 per cent. During the same period corn declined 4.3 per cent, cotton 34.7 per cent, cattle 17.1 per cent, hogs 15.9 per cent, and potatoes 26.9 per cent. So, on increasing the price of farm products planned economy didn't work so well.
During the period 1933 through 1937, little pigs were slaughtered, crops of various kinds were plowed under and bounties were paid out of the public treasury for not raising this and that. What was the result? A comparison of imports on hogs, cattle and corn will give us at least a good idea of the answer.
In 1933 we imported 6,470 pounds of hogs.
In 1937 we imported 16,555,218 pounds of hogs.
In 1933 we imported 74,658 head of cattle.
In 1937 we imported 494,945 head of cattle.
In 1933 we imported 160,288 bushels of corn.
In 1937 we imported 86,337,248 bushels of corn.
In 1937 approximately thirty million acres were held out of production, and had our food requirements been produced at home, approximately twenty-five million acres of the land held out of production would have been cultivated.
That's the record for five years of planned economy as applied to agriculture, not in France or Germany or Italy or Russia or Japan or China, but right here in these United States of ours. That's the record taken from the official records of the Department of Agriculture and the Department of Commerce. So, with this record before us of how planned economy works, is it any wonder—if we go into the post-war period under even broader and more stringent centralized control—that I say the post-war outlook for young business men is bad—very, very bad)
I haven't mentioned W.P.B., O.P.A., W.L.B., O.C.D., O.D.T., or any of the other war agencies. I haven't said anything about taxes, or the national debt, or renegotiations, or F.C.C.'s absolute control of the air under the recent Supreme Court decision. I haven't commented on organized labor, export markets, Uncle Sam's playing Santa Claus to the Universe, and a whole host of other things all of which have an important bearing on the post-war outlook. It's impossible in the time allotted to me to make a complete analysis of all of the factors which have a bearing on post-war conditions. Nor have I talked about Social Security, particularly the Wagner-Murray bill which is the blue print for security from the cradle to the grave. This bill was introduced in the Senate a few days ago and each and every one of you should ask one of the senators from your state to send you a copy of it. Tell him you want a copy, of S. 1161 and when you get it, study it carefully. It's important, because this bill for the first time reveals the ultimate objective of the planners.
I want to comment briefly on one phase of O.P.A. activity, also say a few words about renegotiation, then conclude by giving you my idea of the other side of the picture. So far we've looked only at the darker side, but there can and, I believe, should be a brighter side, a much brighter side. Provided those of us who do our fighting on the home front have sense enough and guts enough to see to it that our Republic remains a Republic, that the bill of rights continues in force, that this country stays within the framework of the American way of life, and that American institutions, including private property and private enterprise, do not fall by the wayside.
The O.P.A. activity I want to call your attention to is the determined effort now being made to establish grade labeling. Under grade labeling, brand names would cease to exist. Which is to say, cigarettes, for example, would be grade A., B. and C. and so on. No manufacturer would have any product identification, which means, of course, that he would not have anything to advertise and if there wasn't any advertising, how long would newspapers and magazines be able to continue publication without being subsidized by the government? And if the government was putting up the money, who would control what went into the news and editorial columns? All of which adds up to the fact that "there are more ways of killing a dog than choking him on butter."
Now for those few words about renegotiation. The renegotiation law became effective on April 28th, 1942, its purpose being to prevent excessive profits on war production. What constitutes an excessive profit was not defined in the law, nor were rules of procedure laid down. In other words, the law is pretty much a blanket piece of legislation under which the several Price Adjustment Boards, each of which operates independently, have complete freedom to recapture profits and to force down prices as they see fit.
I'm not in any sense advocating that any war profiteer be permitted to keep ill-gotten gains. The worst thing in the world which could happen to American business would be for this war to be followed by the scandals on excessive profits which followed World War I. On the other hand, I am vigorously advocating that war contractors be permitted to retain a reasonable profit; that provision be made in renegotiation for reconversion; that renegotiations take into account all of the costs of production, including income and excess profits taxes, and that the cloak of secrecy which now surrounds renegotiations settlements be dispelled.
There isn't anything in the law which says that renegotiation must or should be applied before taxes, and since profit is not actually a profit until the full cost of doing business has been deducted, and most certainly taxes are part of the cost of doing business, renegotiation settlements should be made on a net basis, the profit allowed should be after taxes. Also, there isn't anything in the law which says that renegotiation settlements must be kept secret. Certainly, there is no need for secrecy so far as the conduct of the war is concerned because information on the settlements made with the larger companies whose stocks are listed on the stock exchange can be obtained from the statements they file with S.E.C.
As it is now, no manufacturer has any idea what to expect under renegotiation. He hears about one company which was allowed thirty per cent on its selling price and then about another company which only received ten per cent on cost, and so on. His turn to be renegotiated may not come for a year or more during which time he doesn't know whether he's afoot or on horse back. And with this unknown factor added to all of the other uncertainties connected with doing business these days, it makes efficient operation almost impossible.
If settlement were publicized and a manufacturer in Missouri, for example, knew what profit had been allowed to a company in the same line of business in New York, he'd at least have some idea what to expect when his turn came.
So much for that. I said a moment ago that there should, and I believed could, be a brighter side to the post-war outlook for young business men. I'll go farther and say that the post-war period should provide the biggest and best opportunities that ever existed for young men at any time, any place on the face of the earth from the beginning of recorded history. I know I'm taking in a lot of territory and I do it deliberately.
What could possibly make the vast difference between the picture drawn by my opening statement and the picture drawn by the statement I have just made. The answer is factual information. Abraham Lincoln summed up this situation in a few words a good many years ago. He said, "I have faith in the common people. Tell the people the truth and the nation will be saved." I have that same faith. If I didn't have, I wouldn't be here talking to you today.
We all know that the judgment of any executive is no better than his information. Too many of us, however, overlook the fact that exactly the same thing is true of a truck driver, a carpenter or brickmason, a plumber or a factory worker, or any other American citizen. When these people understand what private capitalism is and what private enterprise means to each individual citizen in the country and to his family, the vast majority of them will be just as staunch advocates of individual free enterprise as you and I.
How many of these people do you suppose have the facts on planned economy which I gave you concerning the A.A.A.'s farm program? I haven't any idea either, but it's certainly a mighty small percentage. How many of them know that labor gets more than eight-four cents out of every income dollar? There are literally thousands of similar pieces of factual information which should be gotten to all of our people all the way down to the bottom of the lowest income groups.
That's an awful lot of folks to reach, but they can be reached and they must be reached if the brighter side of the post-war picture is to become a reality.
Please understand that I don't want anyone to at any time do anything which will in any way hinder or disrupt our war effort. Winning the war in the shortest possible rime and with the smallest possible loss of life is more important than anything else, and must be considered by all of us all of the time.
There are many things, however, which all of us can do to help prepare for the dynamic, rapidly expanding economy we can and should have following the war which will not in any way interfere with the war effort. Scientific development has compressed into the last two years the normal advancement of fifty years and this development applies to everything—automobiles, refrigerators, housing, clothes, furniture, anything you can think of. When the shooting stops, there will be in this country a pent-up demand for goods the like of which the world has never known. And there will be more money in the hands of the lower income groups than ever before.
What's our first step if we want to help prepare for peace? I'd say it is to eradicate the philosophy of scarcity from the minds of all of our people. To me that philosophy is the silliest thing that anyone ever seriously suggested. If it was carried to its ultimate conclusion, it would mean that after awhile everyone would have everything for producing nothing. Absurd—certainly it is, but nevertheless, that's the soothing syrup which has for years been fed to millions of Americans. There never has been and there never will be a successful substitute for hard work and thrift.
An equally silly idea is that of persons who contend our frontiers are gone, that this country can't develop any further, that the beat we can possibly look forward to is a static economy and, therefore, we might as well get busy dividingup what we have because we'll never have more to divide.
I'm not much given to making predictions, but here's one you can paste in your hat band. Within ten years after the end of the war, at least sixty per cent of the total production in the United States will be on new products which were not and never had been in commercial production when the war ended. That's what I think of the idea of a static economy. The use of farm products as raw material in industry is just getting rightly started and a great stream of unbelievable things is coming out of research laboratories. I should qualify this by saying that my prediction is based on our being governed by laws, not by executive orders, decrees or directives emanating from two hundred or more boards, bureaus, agencies or departments. Also, it is based on the government acting as an umpire, management being free to go ahead on its own initiative.
A new born baby might be used to illustrate the fact that security from the cradle to the grave is dead wrong. The first thing that happens to him is, he's held up by his heels and given a good hard smack. If he starts yelling, starts struggling, he has a chance to live. If he remains passive, doesn't try to help himself, that is both the beginning and the end. Our Creator intended that life should be a struggle from the cradle to the grave and I for one am perfectly willing to bow to His judgment.
I might go a step further along this line by pointing out that no matter how much reading or studying you may do, you can't make me an educated person. If I want an education, I must work for it myself. By the same token, no matter how much manual labor or how much exercising you may do, you can't put any muscle on my arm. If I want muscle, I've got to earn it for myself. Also, if I want security, it's up to me to provide it for myself and, personally, I wouldn't have it any other way.
There are many other things I might mention, but I believe what I have said lays the foundation for a suggestion I want to make, which is that you and I and tens of thousands like us must immediately become salesmen of the finest product anyone ever had to offer—the United States of America.
Our line is complete. It includes constitutional government, the Bill of Rights, freedom of opportunity, private enterprise and all of the related items which go to make up the true American way of life. The first step we must all take is to become thoroughly familiar with our merchandise, and then to everlastingly push the sale of it. Certainly we'll meet resistance, but you know a good salesman really doesn't Start to sell until the prospect says "no."
Part of our selling must be that we ourselves fully discharge our duties as citizens which, among other things, include expressing our views at frequent intervals to our elected representatives in public office. This is tremendously important and is one place where most of us are mighty lax.
Public opinion is always the final determining factor in a Republic, and you fellows, when you go to your homes in every part of the country, can be very effective in creating public opinion in your respective communities. How about it? Are you willing to become salesmen of America? Are you willing to help in reinforming and reselling America and American institutions to Americans? If you are, and if I can at any time be helpful to you in any way, don't fail to call on me.
And now I want to leave one final thought with you and I earnestly hope you'll keep it with you all the time from now oil That is . . . "ETERNAL VIGILANCE IS THE PRICE OF LIBERTY."