A TOUGH FRIEND IN THE WHITE HOUSE

ACCORDING to the standard political form-charts, businessmen are supposed to get a better deal from a Republican President. Cherished assumptions aside, the track records are not always so clear. Dwight Eisenhower had the most vigorous trustbusters since Teddy Roosevelt's day, and his economic advisers supported tight-money policies few businessmen favored. John Kennedy had his celebrated showdown over steel-industry price increases, but he also advocated the tax cut that gave a substantial lift to profits. Lyndon Johnson eagerly courted businessmen and had great initial success, though the relationship deteriorated. How will businessmen fare with Richard Nixon?

No. 1 Problem. While it is too soon for certainty, there are signs that those who expect particularly gentle treatment will be disappointed. The President has made no sudden or sharp breaks with the business policies of his Democratic predecessors, nor is he likely to do so. The No. 1 economic problem is still inflation--a fact that was underscored last week by a Government survey predicting an increase in capital spending of nearly 14% in 1969, compared with only a 4% gain last year. To fight inflation, the Nixon Administration intends to extend the surtax, keep money tight and aim for a slight budget surplus--much the same policies that Lyndon Johnson pursued in his last days as President. Nixon will undoubtedly try to dispel the common belief that Republicans are irrevocably probusiness, especially since his overriding domestic goal is to "bring together" a nation that is already rent by too many divisions.

Yet the mood and tone of Washington could change in subtle ways. For example, businessmen might expect to find it somewhat easier to articulate their aims and ideas to a Republican Administration. As Commerce Secretary Maurice Stans says: "Business will get no special favors, but it will get full consideration of its viewpoint."

Executive Roster. As in previous Administrations, Democrat and Republican alike, Nixon has placed a large number of businessmen high in the Government. His twelve-man Cabinet includes seven former bankers, corporate lawyers and business executives: John Mitchell, David Kennedy, George Romney, John Volpe, Walter Hickel, Maurice Stans and Winton Blount. Many businessmen now occupy sub-Cabinet posts that often were filled by professors and civil servants.

Their presence is most conspicuous in the Defense Department, where Deputy Secretary David Packard, the millionaire co-founder of California's Hewlett-Packard Co., is only one of half a dozen business executives in the inner circle. Among the many others at high levels is Nathaniel Samuels, former managing partner of Wall Street's Kuhn, Loeb, a deputy Under Secretary of State. The new Under Secretary of Labor is James Hodgson, a former Lockheed Aircraft vice president for industrial relations.

These men talk the language of business, and they are willing to listen. There is, of course, a vast difference between listening and doing just what business wants. Possibly because they are taking pains to avoid accusations of pro-business bias, the President's appointees are acting fairly tough. Examples:

STOCK MARKET. During his campaign, Nixon stirred much criticism by promising an end to "heavyhanded bureaucratic regulatory schemes" for policing the securities business. Nonetheless, Hamer Budge, new head of the Securities and Exchange Commission, has stressed that he will combat malpractices as vigorously as his activist predecessor, Manuel Cohen, who has praised Budge. A judge from Idaho, Budge is particularly eager to protect the interests of small investors.

BANKING. Even more vigorously than Johnson, Nixon and his aides are campaigning against one-bank holding companies, which the bankers set up to diversify into other businesses. The Administration considers the bank-holding-company trend to be a significant danger and is moving toward legislation to curb it.

CONGLOMERATE MERGERS. Both the White House and the Democratic-controlled Congress are both investigating them. That displeases some, but by no means all, businessmen. Among the most outspoken foes of conglomerates are old-line business leaders who are fearful of being taken into crazy-quilt mergers. Last week Nixon's chief trustbuster, Richard McLaren, said that his department may bring suit to break up some conglomerate mergers that have already taken place. McLaren thus goes beyond his Democratic predecessors, who showed no inclination to test their legal power to fight conglomerates. If McLaren sues, he will invoke Section 7 of the Clayton Antitrust Act, which prohibits corporate acquisitions that "substantially" lessen competition. Meanwhile, Congress is considering a bill to end the favorable tax treatment accorded to companies that issue debentures to pay for mergers.

Still, Nixon has given in to some special interests, particularly in the area of foreign trade. In a recent press conference, he made an impassioned plea for freer trade that disappointed high-tariff protectionists. The U.S., however, has pressured Europe's Common Market and Japan to impose "voluntary" quotas on steel exports, and Nixon has made clear that he favors similar quotas for textiles. Another threat to free trade comes from home builders and lumbermen, who want the U.S. to curb timber exports to Japan. Partly because of high Japanese demand for U.S. lumber, domestic prices have risen by nearly 100% in the past year, increasing the average cost of a new house by $1,200.

On broader issues, Nixon believes that private enterprise should play a larger role in solving the nation's social problems. But he has run into opposition to his plans for offering tax incentives to businessmen who sponsor job retraining and black-capitalism projects. Congressional Democrats consider the idea a "backdoor raid" on the Treasury, a disguised form of Government spending. Some businessmen also fault the incentives. Ben Heineman, president of Northwest Industries and a Democrat, fears that if business were to receive tax subsidies but fail to root out social problems, it "could be set up as the goat of the next ten years." That is precisely the risk that businessmen run when working in Washington. The greater their voice in setting national policy, the more they will share the credit for U.S. triumphs--and the blame for failures.

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