Management's Job


By H. W. PRENTIS, JR., President, Armstrong Cork Company, Lancaster, Pa. and Chairman, Legislative Policies Commission of N.A.M.

Delivered before the Annual Convention of the National Association of Manufacturers, New York City, December 9, 1943

Vital Speeches of the Day, Vol. X, pp. 200-204.

AS some of you know, I have had the privilege of speaking in various capacities at previous meetings of the Congress of American Industry. I can truthfully say, however, that I have never been more eager to drive a message home than I am this afternoon in my function as Chairman of the Legislative Policies Commission, which might far better be called "The Better America Committee." During my talk today I shall utter 4,375 words and, frankly, I wish I had some sort of radar apparatus by which I could get the exact range of every mind and heart in this audience. For time is short, and the task forces of those who seek to undermine the governmental system under which America has grown great have entrenched themselves strongly in the fox holes, pill boxes and fortresses of bureaucracy. To loosen the throttle hold that they have secured on the throat of private competitive business—one of the vital bastions

of our freedom—is a job that will call for every bit of intelligence and zeal that American business managers, and other patriotic citizens, possess. As a former Cabinet officer of the present administration said recently: "We need a great crusade to restore America to its own people."

Looking back over my own business career, 1 realize that it took me quite a while to learn that a real business manager has two functions—not one. The first is clear: He must lay plans and carry them through. The second is not so obvious, but equally important: He must create among his associates and employees an atmosphere of sympathetic understanding of his objectives, which will ensure the smooth and successful execution of his carefully prepared programs. Formerly a good business manager could stop there. But that was before government stepped in and took over the control of our economic life. Today management's job has been extended far beyond its previous bounds. That job now includes a large portion of a task that all good Americans must shoulder, namely, the creation of the type of governmental climate required for the preservation of private competitive business—one of the cornerstones of our liberty.

In the early days of the Republic, when administrative power was lodged in the hands of Presidents who had themselves helped to set it up, the people could rely on the Executive Department to jealously guard their freedom through scrupulous observance of the Constitution and the exercise of executive self-restraint. Later, as the memory of early struggles against royal tyranny grew dim, and the Executive Department sought more power, the Federal Courts became a mighty bulwark of constitutional freedom. In recent years, however, "sociological jurisprudence" has left the American people only one source to look to for the preservation of their liberty, and that is Congress. Today the 531 members of that body constitute the only dependable defense line that stands between them and national socialism.

Do not say lightly that I exaggerate. Read the plan of Professor Alvin H. Hansen, the trusted economic adviser of the present administration in which he advocates the establishment of a so-called "Monetary and Fiscal Authority." Under his recommendation "the executive should be empowered to increase or curtail public improvement expenditures" . . . and "to determine the imposition and withdrawal of taxes." This, he calls "bold social engineering" in order "to make the economy workable under modern conditions"! Analyze the statements of Mr. Berle, Assistant Secretary of State, in reference to the desirability of procuring productive capital from governmental instead of private sources. That spells national socialism. Examine the radical monographs of the Temporary National Economic Committee and the socialistic recommendations of the President's National Resources Planning Commission. Get the recent reports of the Select Committee to Investigate Executive Agencies, headed by Representative Howard W. Smith. Your conclusions will support mine. So the American people do have an early "appointment with destiny" in respect to their freedom—in fact, not in theory. And because we are an industrial nation, business management must assume the major segment of responsibility in meeting that appointment.

Industry plans for a better America in the post-war years—an America of jobs and freedom and opportunity. The broad objectives of that program were presented to you at the luncheon today by Mr. Crawford—our hard working and hard hitting President, in his own inimitable and inspiring fashion. Mr. Weisenburger has just given you its details. It is a program for promoting production—for providing jobs and better living and security—in the American way. It is a program to make possible all of these things while retaining and increasing the dignity, self-reliance andfreedom of the American citizen. It is definite, positive and constructive. It points out each specific step and the reason for it. It is not designed for industry alone; it is a program for the American people as a whole. It cannot possibly satisfy everyone, for we do have diverging interests, but it is a program on the fundamentals of which we can all agree. It is based on one primary assumption, namely, that* the American people want freedom. It offers no miracles, no panaceas. It promises nothing to anyone save as a result of his own efforts. But it does promise opportunity and a square deal. No sane American has ever asked more.

It is not enough, however, to have a constructive program. If it gathers dust in the archives of time, it will never serve America. Management's job, therefore, is to take it to the people and get them to approve it—not because it is new, not because it is revolutionary, not because it promises something for nothing—but because it takes the best from the America that has been, and seeks to improve it for the better America ahead. It is based on facts, on experience, on performance; on mutual trust, not suspicion. It rests upon the recognition of the rights of all .classes of our population—capital, labor, management, agriculture and the learned professions alike. Hence, the first part of management's job is to practice what it preaches; to recognize that in the highly industrial world in which we now live, business has certain responsibilities that it simply must assume, because the voluntary acceptance of social stewardship is the keystone of liberty. Hence it is management's job to weigh every day-to-day decision it is called upon to make in respect to products and prices, dividends and securities, research and patents, customer treatment and employee relations—in the light of the ultimate effect of such decisions not merely on the individual business involved, but on the whole national body politic To this end management must acquire a better sense of proportion in respect to competitive tactics, and think more and more in terms of the long range business strategy required to perpetuate the free institutions that we have until recently so complacently enjoyed.

To use business terms, management's job is to take this program for a better America and merchandise it effectively. That job—just as would be the case with any product in your own business—involves: first, advertising, second, sales promotion, and third, selling. Handling the advertising is the function of the National Industrial Information Committee, whose program Mr. Adams and Mr. Harrison will present to you. The sales promotion phase is represented by the group cooperation activities of the Association in which industrial managers and businessmen are meeting with ministers, educators, farmers and women's organizations to discuss national problems of common interest.

The sales function is the particular task of The Better America Committee of which I have the honor to be Chairman. It is our task—not to establish policies—but. taking the conclusions and recommendations of the working committees of the National Association of Manufacturers—help management to do the job of selling these policies to the public and the men and women who represent us in Congress. For, after all, no matter how much post-war planning may be done by individual businesses and by local communities and states, the ultimate success of all those programs hinges on the governmental climate in which private competitive business will have to operate when peace comes. Various means to assist you to carry out this selling job in your own community will be placed at your disposal. But to do it you must, in essence, become a teacher. Someone has said, you know, that all business is teaching: Teaching people to make goods is manufacturing; teaching people to want goods is selling; teaching people to work together is organization. I add a fourth: Teaching our fellow-citizens to understand the American system is practical patriotism.

To be a good teacher, however, one must know his subject. A salesman cannot sell a product unless he knows how it is made, what it will do, and its distinguishing points of excellence. How many of us managers of American business really know the nature of our peculiar form of government? How it was put together? What the vital factors are that have enabled it to function successfully for 154 years? Very few. So, first, we must ourselves understand the system we have to sell. Fortunately—apart from my old favorite, the Federalist Papers—there are some excellent books now available from which you can get that information in easily digested form. If there is any man or woman here who has not read these four books, let me urge you to do so at your first opportunity: "Challenge to Freedom," by Dr. Henry M. Wriston, distinguished President of Brown University, who will speak at the dinner tomorrow night; "The Spirit of Enterprise," by our able fellow-industrialist, Edgar M. Queeny, of the Monsanto Chemical Company; "The God of the Machine," by Isabel Paterson—brilliant book critic of the New York Herald-Tribune, "Men in Motion," by the eminent war correspondent, Henry J. Taylor.

For fear, however, that some of you may not perform this home work as promptly as you should, let me give a bare outline of the American system as I see it. To our forefathers, tyranny was not just a word. They knew what it meant literally in terms of religious, intellectual, economic and political oppression. They dreamed of a land where every man—no matter how humble—could have liberty and the opportunity to pursue happiness in his own personal way, so long as he did not interfere with the rights of others. Hence, they resolved to set up a form of government that would prevent tyranny from ever raising its ugly head again. They gave us the best instruments designed to that end, that the mind of man has yet devised—our Federal and State Constitutions. But we in business all know that no contract is worth any more than the spirit behind it. Similarly, our constitutions are worth no more than the kind of citizens behind them. It is management's job to help make the right sort of citizens.

Our forefathers came from many creeds and countries but they were fundamentally religious people. They put the phrase, "In God We Trust," on every coin they minted. So naturally enough the cornerstone of the Republic they established was a religious concept: the conviction that every human being is endowed with a soul that is sacred in the eyes of a Sovereign God. From this principle they deduced two basic theses:

First, they concluded that, since God had created man in his own image with the power to distinguish between right and wrong, every individual ought to listen with respect to the opinions expressed by his fellow citizens, and that whatever judgment was expressed by the majority of such divinely-created human beings after full and free discussion, was likely to be closest to God's will for all of them. Vox populi, vox Dei—the voice of the people is the voice of God! Governments derive their just powers from the consent of the governed.

Their second thesis was equally logical, namely, that every mortal soul is endowed by its Creator with certain natural inalienable rights that no human agency whatever may justly invade—neither any man called "king," nor any group of men representing a temporary majority called "government." To guard these natural rights, government, in John Locke's words, must confine itself to the protection of life, property, peace and freedom.

The problem of the founders of this Republic, therefore, was how to combine these two opposing principles into a workable, durable government adapted to human nature in its manifold economic, intellectual and spiritual aspects, and to a large population scattered over a wide geographical area. In other words, the question they faced was how to make effective the majority will of the people in governing themselves and at the same time not destroy the individual rights that the Creator had conferred upon each person.

They resolved this paradox by setting up a government of laws—not a government of men. As the first step, they adopted a written Constitution with its Bill of Rights, as a permanent bulwark to safeguard individual and minority rights from hasty and ill-considered attacks by temporary majorities. Hence, they purposely made the process of amending the Constitution long and difficult. That is the reason why sociological jurisprudence—stretching the Constitution to meet current demands for legislation—instead of honest forthright amendment of that document after full discussion, is so very dangerous to our freedom. As Thomas Jefferson said: "Our peculiar security is the possession of a written constitution. Let us not make it a blank paper by construction."

In the second place, our forefathers incorporated in their system of government the principle of representative rather than direct action, with different terms of office and different modes of electing senators and representatives, to cushion the action of any current majority, and to enable government to function over a large geographical area.

Next, they provided a system of checks and balances by painstaking separation of the powers of the legislative, executive and judicial branches. I wish I had time to quote the provision on this point in the Constitution of Massachusetts, which was adopted in 1780 and which spells out explicitly the fact that in the government of that Commonwealth no one of the three departments may ever exercise any of the powers of either of the others "to the end that it (the government of Massachusetts) may be a government of laws and not of men." As the Federalist Papers said: "The accumulation of all powers—legislative, executive and judicial—in the same hands, . . . may justly be pronounced the very definition of tyranny." Hence the present blurring of the lines of responsibility between the three departments of the federal government—which had gone far even prior to the outbreak of the war—is perhaps the most sinister of all threats to our freedom in the post-war period. The rise of the tyranny of administrative law—the bureaucratic despotism from which we suffer today—would be impossible if the lines of demarcation between the legislative, executive and judicial functions had been kept sharp and clear.

As a fourth step, the founders of our Republic divided the responsibilities of government between the Federal Union and the states, counties and towns. They did that, so that each particular segment of government would not get too big for an intelligent citizen to understand its functions and for his elected representatives to legislate intelligently. Today the federal government has arrogated to itself so many state and local powers, and has become so extremely huge and complicated that the average Congressmen will tell you frankly that it is impossible for him even to read all of the legislation that is proposed or desired by the various federal departments. In other words, the size of the central government puts such a tremendous load on Congress that our representatives are unable to function effectively to protect the rights of the people who elected them. It is exactly as though a business corporation permitted itself to expand to a point where the directors and officers chosen by the stockholders, found themselves unable to cope with the enormous number of problems that wereput up to them for decision. Centralization of power in Washington, moreover, undermines state and local government, and thus destroys the opportunity that local self-government affords for practical experience in citizenship. Unless a man first acquires some training in handling public problems in state, county, town or city, he certainly is not likely to become qualified to deal with the large questions of national scope on which his freedom ultimately depends!

Drawing from the experience of our British ancestors, the fifth step was to keep the control of the public purse in the hands of the House of Representatives—the arm of government closest to the people. Every effort at popular self-government that I have read about in history, has eventually been destroyed by some demagogue who has gotten his hands on the people's own money. In recent years Congress has delegated more and more latitude in respect to public expenditures to the Executive Department. Hence another grave threat to our freedom in the post-war years is arising from what might well be termed, the privy power of the public purse.

Last but not least, the men who set up the American Republic reserved the largest possible field for local and individual initiative by strictly limiting the powers of the central government. In respect to business, only interstate and foreign commerce was made subject to its regulation. The Tenth Amendment to the Federal Constitution provides specifically that "the powers not delegated to the United States by the Constitution nor prohibited by it to the states, are reserved to the states respectively or to the people." As the late Justice Brandeis said: "The makers of the Constitution . . . conferred, as against the government, the right to be let alone, the most comprehensive of rights and the right most valued by civilized men." I leave it to you to say to what extent in your own business that halcyon situation still exists!

There, in a nutshell, is the mechanism by which our forefathers sought to harmonize the will of the majority with the personal rights of the individual. Jobs, freedom and opportunity for us and succeeding generations depend on how well we safeguard that mechanism—a mechanism based on meticulous analysis of all previous attempts at selfgovernment in the world's history; a mechanism so ingenious, so carefully organized, so accurately compensated against human vagaries and lust for power, that it led Gladstone to say that the Constitution was "the greatest instrument of government ever struck off at a given time by the hand and brain of man." The preservation of its basic principles is just as essential to the continuation of the private competitive business system of this country, as the maintenance of the political, intellectual and spiritual freedom that the Constitution guarantees.

So the Committee which I represent here today is organized to help management carry the truths on which freedom and post-war progress depend, to the mind and heart of every manufacturer in America. Working in cooperation with the business organizations affiliated with the National Industrial Council, our objective is to imbue businessmen generally with this fundamental philosophy so that they in turn may be able to cultivate an adequate and accurate understanding of the vital place that private enterprise occupies in the life of every American citizen. All of this to the end that an aroused public imbued with its own legitimate self-interest will seek appropriate means of protecting itself in the benefits that the private competitive business system provides.

At the present moment our Committee is preparing graphic presentations dealing with five specific matters in respect to which legislative correction is necessary, namely:

(1) The vital importance of private capital formation in order to prevent the advent of national socialism in the post-war years.

(2) A proper scheme of taxation designed to preserve individual incentive on which the development of new enterprises and new jobs depends.

(3) The importance of sanely organized labor relations so as to insure social unity. Obviously, representative democracy cannot long exist in the face of acute class cleavage.

(4) The importance of providing opportunity for every individual to safeguard his own future against the four specters of sickness, unemployment, old age and death. Sound social security is a stabilizing factor against revolution and anarchy in any form of government.

(5) The vital necessity of curbing bureaucracy through the revival of local responsibility for local affairs.

Through these five presentations and others to follow, we hope to equip the business executive during this coming year with enough facts and enough definite remedial suggestions to enable him to become a true business missionary in behalf of a "Better America through Better Private Competitive Business." Such legislative suggestions as are offered will be based—as I have said—on the reports of the Committees of the National Association of Manufacturers working in close cooperation with the constituent organizations of the National Industrial Council. I am convinced that state, local and national manufacturing trade associations, without interfering with or detracting in any way from their own activities, can help achieve a broad program for private competitive business and American liberty, that will give a thrill of satisfaction to every manufacturer for having secured his own salvation through the vision of the organizations that he supports. In fact, with the public now more favorable to business than in years, and a people weary of arrested progress, of costly tampering with economic verities, it would be unthinkable if industry were not to achieve the highest degree of unity in furthering this program for a better America.

To sum up: Management's job is, first, to devise a program. That has been done. That program must now be publicized to the American people and their representatives in Congress. To sell it effectively, management must understand the principles of the American Republic; apply the political and ethical philosophy on which it is based to the conduct of the every-day affairs of business; be articulate in the interpretation of those principles to the public; test every governmental proposal against those basic concepts; support every constructive move, whether it springs from management, labor, agriculture or government, that will make for a better and more productive America; and last but not least, emulate the faith and courage that characterized the men who came to the shores of this new continent to escape the religious, intellectual, economic and political tyranny of the Old World.

Those ancestors of ours would never have landed on "the stern and rockbound coast" of New England or fought their way into the trackless Appalachians if they had not been at an early stage in the recurring cycle of human freedom; Tyranny had brought them spiritual faith; faith had brought courage; courage, the will to freedom. Thus they demonstrated once more the truth of Pericles' assertion 2400 years ago that "The secret of liberty is courage"; not food, not comfort, not money—but just plain old-fashioned fortitude of mind and body and soul. How many business managers have equal courage today—in the face of the taxinspector, the factory inspector, the boiler inspector, the wage and hour inspector, the labor board inspector, the SEC inspector, the wage and salary stabilization inspector, the OPA inspector, the WPB inspector, the congressional investigator? How many of us are willing to face persecution, if necessary, to protect and defend our hard-won constitutional rights?

So while our brave sons and brothers are dying on the battlefronts, one of management's primary jobs is to have a rebirth of courage—no matter how loud the threatening war whoops of the bureaucrats may sound in our ears, or how many business scalps may be drying at the moment in their marble tepees along the Potomac! One thing is sure: If business managers, and all other patriotic, intelligent Americans, do not fight the good fight for freedom here on the home front, the national socialists in our midst who glibly maintain that government can control our economic life without destroying our political, intellectual and spiritual liberty, will ultimately win by default, and our nation shall then have fought World War II in vain.

An eminent American author epitomizes the lessons that history has taught him in four well-known epigrams: He whom the gods would destroy, they first drive mad with power. The mills of God grind slowly, but they grind exceeding small. The bee fertilizes the flower it robs. When it is dark enough we can see the stars.

In the darkness and confusion that now envelops the whole world, in the poignant personal grief of our mounting casualty lists, we can see the same stars in the heavens that guided the Pilgrims of New England and the planters of Virginia across the stormy wastes of the North Atlantic three hundred years ago. In fact at this very moment those same stars are guiding the navigators of a thousand ships and planes carrying our flag on all the seven seas. Likewise, the same religious and philosophic principles that directed the minds and hearts of the wise men who set up the American Republic, are still there to keep us on the true course to freedom, if we 20th Century Americans will but seek out those stars through the murk of our ignorance and apathy. Only by finding and following them can American management help secure for all our people the choicest blessings of free men: the eternal quest of a venturing mind, the sweeping reach of an unleashed spirit, the sounding joy of an unfettered soul!