Brown for Business

The late Theodore F. Merseles once declared that he was more interested in "making young men" than in making money. One young man he made was Lewis H. Brown, an Iowa-born farm boy whom he discovered in Montgomery Ward. When Mr. Merseles moved from the mail-order business to asbestos as head of Johns-Manville Corp., he took along Lewis Brown as his assistant. And after Mr. Merseles' death in 1929, Lewis Brown succeeded him as J-M's president at 35.

Last week President Brown undertook to give the American Bankers Association in New Orleans (see above) a definitive exposition of the current business viewpoint. Commented Financial Editor Ralph Hendershot of the pro-Roosevelt New York World-Telegram: "Few speeches have ever been made . . . which presented the position of so-called big business so well. . . . The Republican party could build its entire campaign around his speech."

One of Mr. Brown's prime points was that businessmen "do not care whether . .. results are obtained from one party or another." Moreover, he said,, business & industry are not opposed to:

1) Reform, "providing the method is legal and practical."

2) Stock exchange and securities legislation. But: "The present Securities & Exchange Act has very definitely prevented the opening up of the capital markets. . . ."

3) Minimum wages, shorter hours, elimination of child labor, "fair treatment of labor." "But industry is opposed to . . . laws that prohibit the right of a man to work or that attempt to regiment and control the activities of private enterprise."

4) Parity farm prices. "But business does look with considerable question upon the basic principle of paying people for what they do not do or of destroying crops while people starve."

5) Relief. "But business is opposed to . . . the method of handling relief that makes it more desirable for people to stay on relief than take jobs. . . ."

6) Social Security. "But industry is generally opposed to ... 'unemployment insurance' that sets up an enormous fund which will result ultimately in providing an additional source for the sale of billions of dollars of Government bonds to provide billions for bureaucracy to spend. . . ."

7) Public Works. But business deplores their administrative waste, extravagance, red tape.

8) Devaluation of the dollar. But business is opposed to an unstable dollar.

9) "The Government exercise of its proper functions. . . . But business does oppose the theory that Government bureaucracy can operate more efficiently than private enterprise."

10) Professors-in-Government. "But business recognizes clearly that a man eminently qualified to head a research department should not necessarily be placed in charge of factory production."

Invisible Guest One thing that Mr. Brown and all Business opposed unequivocally was the staggering increase in the cost of government--local, state and national. In 1915 the total cost for the entire U. S. was $3,300,000,000. By 1929 it had been boosted to $11,500,000,000 and last year footed up to $15,500,000,000, one-third of the national income. During the same period the U. S. population increased from 99,000,000 to 126,000,000 but per capita cost of Government nearly quadrupled to the 1934 figure of $122.52, most of it paid in hidden taxes, the rest represented by debt.

"Today industry is beginning to realize that its greatest competitor for the citizen's dollar is Government," said Mr. Brown. "But in this competition there is no equality. For whereas business must appeal to the citizen for its share of his dollar and the citizen is at liberty to bestow it freely or withhold it ... taxes must be paid first and are a compulsory levy upon every pay envelope or upon every purchase. Taxes increase the cost and selling price of all products."

Last year U. S. automobile taxes (including gasoline taxes) amounted to $1,200,000,000. That was more than all U. S. motor manufacturers received for new cars. Nearly one-third of all rent represents taxes. Every U. S. citizen who smokes a pack of cigarets per day pays $21.90 in taxes annually.

Declaring that rising cost of Government is the most sinister problem the U. S. faces and that it goes on regardless of the party in power, Lewis Brown nailed his case thus:

"Today there is an invisible guest who sits at the table of every family in this country. He is the invisible tax eater that collects the hidden taxes. When the housewife purchases three pork chops, the butcher weighs them out but wraps up only two. The third he gives to this invisible guest."

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