The Administration: Prescription for Commerce

Nothing annoys President Johnson more than the notion that he cannot get good men to come to work — for him — in Washington. Last week, in his first Cabinet appointment, the President took special pains to disprove that theory: he named John T. Connor, 50, president of the multimillion-dollar drug firm, Merck & Co., as his new Secretary of Commerce to replace Luther Hodges.

Hodges, 66, a former (1954-1960) Democratic Governor of North Carolina who once showed his salesmanship by posing in his underwear to promote his state’s textile industry, was in John Kennedy’s original Cabinet, made his most notable mark as Commerce Secretary by launching an export expansion program that helped boost U.S. exports from an annual $19.6 billion in 1960 to $25 billion now. But when he was first appointed, Hodges told friends that he would quit after four years. Last week he did—and Drug Executive Connor seemed to fit perfectly the presidential prescription for a replacement.

Who Should? He Should. He is a freewheeling, sharp-speaking man whom other businessmen like to describe as a “maverick,” and he has had solid careers in both Washington bureaucracy and big business. A graduate of Syracuse University (’36) and Harvard Law School (’39), he went to work for a top New York law firm, moved off to Washington in 1942 as a Lend-Lease Administration lawyer, soon switched over to be chief counsel to Dr. Vannevar Bush’s Office of Scientific Research and Development, which was then working on the atomic bomb. He spent a postwar year as special assistant to James Forrestal, then Secretary of the Navy, and in 1947 went to Merck as general attorney. In that capacity he was instrumental in getting his old boss, Bush, signed on as the firm’s board chairman.

Connor has never been modest about his talents or about his ambitions. In 1955, when Bush was scouting for a new company president, he asked 30 top Merck executives whom they would like to see in the job. Most picked Connor, and when Connor himself was asked, he said: “I should be the new president.” Connor was only 40—and he got the job.

He boosted Merck’s research spending to new highs, at the same time in his nine years as president managed to almost triple company profits, from $13 million to $36 million. His salary at Merck is $129,800 a year. He holds 21,000 shares of Merck stock (now $45.50 a share), not counting options, and as of last week he had not decided whether he would keep it (and thereby risk conflict-of-interest criticism), put it in trust or sell it, assuming the Senate confirms his appointment next month.

“Liberal Businessman.” Connor has long been one of the blue-ribbon U.S. businessmen that Washington officials tap for aid and advice. After the Bay of Pigs fiasco in 1961, he helped collect millions of dollars worth of drugs that went to Fidel Castro as part of the ransom for Cuban prisoners. He is vice chairman of the Business Council and a member of the Committee for Economic Development.

Politically, he is Lyndon’s kind of man. Connor used to describe himself as a New Dealer, now says, “I am an independent Democrat—or a liberal businessman.” But when it comes to a conflict between doctrinaire liberalism and business interests, Connor is a businessman first. In 1959, when Tennessee’s liberal Democratic Senator Estes Kefauver was chairing an investigation into drug-industry pricing practices, Connor testified with patient, detailed expertise but found he simply could not penetrate the Keefs preconceptions. Connor admitted that the probe, in a general way, was not without merit, but he blasted Kefauver: “He asks loaded questions; he disregards facts that undermine his line of argument; he watches the morning and afternoon press deadlines and introduces a juicy tidbit at a time that defies immediate correction or refutation.”

In the past, Connor has argued against the Johnson Administration’s effort in current Geneva negotiations to reduce tariff barriers across the board by 50% . Last week, after his appointment to the Cabinet was announced, he was still reluctant to back down. Said he: “I consider myself at the midpoint between a strict protectionist and an all-out free trader. I am against arbitrary 50% tariff cuts across the board for U.S. manufactured goods. Each reduction should also be made on a reciprocal basis with foreign competitors.”

As Commerce Secretary, Connor will head up an awkwardly diversified department that has 33,538 employees, operates on a $4.5 billion budget, and includes the Bureau of the Census, Patent Office, Bureau of Public Roads, Weather Bureau and Area Redevelopment Administration. But the true mis sion of the Secretary of Commerce cannot be written into an organization chart. In its simplest terms, it is to promote confidence in the Administration among businessmen. That is something at which President Johnson himself works almost full time, and he is awfully good at it. In John Connor, the President should have an able helper.