Business: Coalition Congress

Six months ago when the business curve was still on the rise, Chairman Colby Mitchell Chester of General Foods Corp. addressed the Boston Chamber of Commerce. Speaking not only for the makers of Grape Nuts, Post Toasties and Sanka Coffee but also, as head of the National Association of Manufacturers, for a vast and potent slice of U. S. management, Mr. Chester concluded with this prophetic declaration:

“Our present prosperity is, I fear, but a veneer that masks the grave dangers that will be obvious to anyone who explores beneath the surface. . . . Hovering clouds of war, mounting debt, financial fears and continued deficits in these days of comparative prosperity reveal themselves as sinister symptoms in a diagnosis of our national health. . . . But the American people are not dumb. Their pride in the industrial development of our nation is deep seated, and when they are sure that the unsocial in our midst are eliminated, they will turn to Management’s help … to get the ship back on its course. They know industry has the ability; its good faith alone remains in doubt.

“So I suggest to you that you prepare yourself for a newer and finer stewardship—the industrial rebirth of the nation. You ask when? I don’t know. But the task is mighty and the penalty for failure severe, so let us try to be patient. . . .”

For patient Mr. Chester and the rest of U. S. Management the wait was short. In August the business curve shot into the most precipitous toboggan since 1907. There have been a few cacklers in the rear rows but for Mr. Chester and all other responsible U. S. businessmen the Recession was entirely too serious for gloating. They expected trouble, though not so soon, and if it was welcomed at all it was only in the sense that they hoped it would drive home to the Administration and the public the obvious fact that Capitalism cannot function indefinitely without the confidence of Capital.

This week, at the annual “Congress of American Industry,” Capital and its agent, Management, will convene in Manhattan. To this Congress of Industry, the annual convention of the parent National Association of Manufacturers combined with conventions and conferences of the various affiliated and subsidiary associations, will come more and more important men than ever before in this always impressive event’s 42-year history. For this year’s session of the Congress of Industry has aroused more interest, both business and political, than any since N. A. M. was founded in 1895. It did so because most of its members believed the opportunity predicted by Mr. Chester—the moment when Recovery leadership would be transferred or passed by default to Business— was clearly at hand.

Capacity attendance of nearly 2,000 was expected for the N. A. M. banquet which, at $8 per plate, will wind up the three-day Congress in the Hotel Waldorf-Astoria’s Grand Ballroom. It will represent the greatest aggregation of white-tied wealth and power ever assembled under one roof. Scheduled to decorate the head tables along with such non-capitalists as Eddie Rickenbacker, Bishop Manning, Bruce Barton and Sinclair Lewis, are such household industrial names as Owen D. Young, Lammot du Pont, Packer Gustavus F. Swift, Soapman S. Bayard Colgate, Oilman William Stamps Parish, Camelman S. Clay Williams, Steelman Eugene Grace. Copperman Louis Shattuck Gates and many and many another manager of major corporations. Even the rank & file clustered at the common tables will read like a Directory of Directors. And through the rich blue haze of New Waldorf cigars, the nation’s manufacturers will listen to the first woman ever asked to address them—Columnist Dorothy Thompson, Novelist Lewis’ wife.

Dorothy Thompson’s unique invitation was typical of N. A. M.’s painfully self-conscious course in self-improvement, undertaken in its efforts to school itself for political maturity and the national leadership which it felt its members must rightly and inevitably inherit. Lengthening their convention from the usual two days to include a third called “Labor Day,” the manufacturers turned many an unfamiliar stone in their search for enlightenment. They will listen to Leo Wolman on the labor outlook; General Hugh Johnson on “Wages & Hours Legislation;” Colgate University’s President George Barton Cutten on “Hiatus in Social Re-sponsibility;” M. I. T.’s President Karl Taylor Compton and Caltec’s Robert Andrews Millikan on Science & Industry. For national and international information the manufacturers will look to Chairman Doughton of the House Ways & Means Committee and Sir Wilmott Lewis, suave, ironical Washington correspondent for the London Times.

High Tide N. A. M. is not unused to unsettled times. Its official history begins with an account of how the organization was conceived to meet the “crisis” brought on by another Democratic Administration (Grover Cleveland’s). “Great crises,” observes N. A. M.’s historian, “are always the fathers of the men and the measures that bring about their alleviation or cure.” The history continues darkly:

“In 1893 and 1894 the entire country was strangling in the tentacles of a financial and industrial Depression the like of which had never been known in our history. The Wilson Tariff-for-Revenue-Only bill had been enacted into law. It was an uneconomic measure. … It quenched the fires of industry, stilled the hum of machinery everywhere in the land. …”

N. A. M. thereupon pitched in and helped elect as President its guest of honor at the founding banquet in Cincinnati—William McKinley. Through the subsequent decades N. A. M. worked for the Parcel Post Act, the Federal Reserve Act, the Food & Drug Act, Workmen’s Compensation legislation and the Panama Canal. It has always stood for a bigger & better merchant marine, and probably its most notable achievement was in promotion of foreign trade in the days before the Bureau of Foreign & Domestic Commerce. At one time it maintained its own commercial attaches in important foreign business centres, and its voluminous files were eventually taken over by the Government.

But in the public mind N.A.M. has always been identified by two consistent policies—high tariff and open shop. In recent years these two have been almost submerged by the rise of a third, if unwritten policy—Anti-New Deal. The high tide of reaction was reached in 1935, when the most charitable liberal observation was the New Republic’s: that that year’s convention was a “perfect example of Bourbonism in full flower.” Even the New York Times remarked caustically that “spokesmen for business organizations ought not to sound like the Chairman of the Republican National Committee.”

New Faces-Even at this unseasonable period, however, the seeds of reform were sprouting within N.A.M. And the sprouts were diligently cultivated by a group of men who, if not Reds, were progressive enough to realize that times had changed since the days of William McKinley. Among the flowing stocks, wing collars and morning coats of the N.A.M. veterans, they were distinctly new faces. Significantly, most of them had made their public names since 1929. Typical of the N.A.M. “progressives” are men like President Lewis H. Brown of Johns-Manville Corp., Henning Webb Prentis Jr. of Armstrong Cork, Tobaccoman Williams, Chairman Thomas Wilson of Wilson & Co. and, curiously, Steelman Ernest Tener Weir. And for official leadership they hit upon another new face, Colby Mitchell Chester, who had not only grown to national stature during Depression but also brought a new and needed viewpoint to the N.A.M. council table—that of consumer industries. Unlike his N.A.M. predecessor, the late Clinton Lloyd Bardo, who built million-dollar ships for a few billion-dollar customers, Colby Chester sells packaged groceries by the billions of units to millions of units to millions of U. S. housewives. He does business with the public and values public opinion as he values his business life.

Born 60 years ago in Annapolis, son of the late famed Rear Admiral Colby M. Chester, U.S.N., the N.A.M. chairman is a Yaleman with both Sheffield and academic degrees, having graduated from “Sheff” in the Class of 1897 and returning for an A.B. the following year. After law school he joined his father—by special dispensation—for a cruise on the old U.S.S. Kentucky from Manhattan to Hong Kong, dining on the way with the Sultan of Turkey. Back in Manhattan in 1901, Mr. Chester went from law to business and back again to law, and then in 1917 he shut up shop and went to Plattsburg to earn a commission as an infantry major.

After the War Mr. Chester’s Greenwich, Conn, neighbor, now Mrs. Marjorie Post Close Hutton Davies, persuaded him to enter her Postum Cereal Co. as assistant treasurer. By 1924 he was president, and it was under his direction that Postum swelled until it became General Foods Corp. with some 80 products and $74,000,000 in assets. Today as General Foods chairman, modestly ensconced in a white colonial office on the 17th floor of the Postum Building in Manhattan, a portrait of his father over the fireplace, a bust of Lincoln, his favorite character, above his silvering head, Colby Chester shares the corporate detail with President Clarence Francis, devoting more & more of his time to semi-public service. Slight, quiet, earnest, he is a crack tennis player and the best golfer in the company. For some wholly mysterious reason his friends have always called him “Clare.”

Apparently Mr. Chester’s interest in extracurricular activities originated in 1930, when he suddenly invited two dozen leading foodmen to a get-acquainted dinner. And he found, as he had suspected, that few knew one another even by sight. From this group was drawn the Food Industries Advisory Board, which collaborated with the Agricultural Adjustment Administration and the Food Code. All this activity put Mr. Chester in the spotlight; and in 1935 Mr. Chester got a telephone call from the N.A.M. president, asking him to serve as an N.A.M. director. Some of his General Foods directors had personal doubts about the publicity value of the position but they nevertheless gave him unanimous permission. Within a few months he found himself in command. Last year he moved to the chairmanship, the presidency going to Publisher William B. Warner of McCall Corp., a high-voltage supersalesman who once attempted the task of dry-cleaning American Woolen Co.

Press Agent, Mr. Chester’s most spectacular achievement in N.A.M. was the change of pitch between the militant N.A.M. Congress of 1935 and the pacific Congress of 1936, held during the short-lived “era of good-feeling,” right after the Roosevelt landslide. Internally the N.A.M. has also changed—into a pressagent for Industry. Legal and statistical departments continue to operate, but the real job of its permanent personnel is selling what N.A.M. calls the “American Way” to the U. S. public. It furnishes newspapers with free stories, provides platform and radio speakers with free speeches, has made four cinema shorts including one on standards of living. It teaches businessmen how to create local goodwill by opening their plants to public inspection tours. And N.A.M.’s were the sanguine posters that dotted the highways early last year, showing nattily dressed workmen and their immaculate families joyriding and picnicking in the “American Way.”

Head of the N.A.M. publicity committee is Steelman Ernest Weir, but the active publicity director is a onetime reporter named James P. Selvage, who works under the organization’s paid and unpublicized Executive Vice President Walter Bertheau Weisenburger. Onetime managing editor of Samuel Clemens’ old Hannibal (Mo.) Morning Journal, Mr. Weisen-burger went to N.A.M. from the St. Louis Chamber of Commerce, where he was serving as paid head at the time Lindbergh flew to Paris in the Spirit of St. Louis.

In N.A.M. opinion the most serious work it has done this year is to publish a set of rules for dealing with labor and to complete and codify a grand code of business ethics which, if lived up to by all business, would come close to reducing the function of Government to national defense. But such worthy undertakings seem to have about them an inevitable unreality. The notion of self-regulation, so close to the hearts of high-minded businessmen, is never implemented with sanctions to punish recalcitrants. In writing its eleven-page rule book for dealing with labor, N. A. M. by some sort of perverse dexterity managed to avoid the use—even once—of the word “union.”

Voice-Business in politics is often as pathetically inept as politics in business. The very conception of Business as either organized or united is a delusion. Not only is company aligned against competitive company, industry against competitive industry but like politics, business has its mavericks like Henry Ford, its undecided liberals like Owen D. Young, its idealists and benevolent paternalists like George Francis Johnson and Walter Jodok Kohler, its bitter-enders like Tom Girdler, its hard-boiled realists like Walter P. Chrysler or William S. Knudsen. Only on the broadest and vaguest questions does business really offer a united front.

Nevertheless, N. A. M.’s members are the most potent collective eyes, ears and voice of Industry and Big Business (the U. S. Chamber of Commerce serves in a like capacity to little business and theprofessions). And what the N. A. M.’s eyes and ears have seen and heard from Washington in the past five years has pained and puzzled them. To begin with, Business and politics do not operate on the same frequency. One thinks of time in terms of production schedules and amortizations, the other in terms of incumbencies and election days. Basic confusion of U. S. Business since 1932 has been this contradiction: whereas all the New Deal’s policies are based on the assumption that private enterprise is a workable system, Franklin Roosevelt has based his political popularity on his lack of confidence in businessmen.

For one brief honeymoon period at the start of the New Deal, Business and Government pulled together in an amicable partnership. As NRA took shape the relationship changed to mutual suspicion, changed again, to what General Hugh Johnson calls “mutually meditated revenge.” Late in 1934, at the Administration’s suggestion, 90 potent U. S. businessmen went into a huddle at White Sulphur Springs, W. Va. to draft their own Recovery program, dispatching it when done to the White House in the custody of the late Judge Charles Bismark Ames, a kindly old oilman. Judge Ames was shunted off to White House Secretary Marvin McIntyre, who apparently conveyed the plan to his wastebasket.

With the persistence of born salesmen, business leaders continued their peace gestures, notably after last year’s election when both N.A.M. and the U. S. Chamber of Commerce seemed determined to cooperate with the President if it killed them. Not until Recession had softened his mood, however, was Franklin D. Roosevelt ready to listen. The situation, both Business and the President must know, is now too critical for malice on either side. If the President is as willing to play ball with Business as he reports himself to be, Business now has the ball with three years to go on the President’s term.

And it looks as if Business would gain a first down this week, for in the final speech of the Congress of American Industry, Colby Chester states the case of industry more simply, and moderately, than it has been stated to date. Frankly and significantly recognizing the political and economic power of Labor, he asks for an immediate three-way conference—Business, Government and Labor.

The Proposals that Mr. Chester will offer in Business’ behalf could hardly be called novel. For its part Business is to make an earnest effort to put its own house in order and give serious thought to long-range economic planning. From Labor it wants union financial statements, voluntary cessation of political contributions, responsibility for propeny damage, and co-operation in amending the Wagner Act. Specifically Business is opposed to such legislation as:

1) Wages & Hours Bill, not “because it is opposed to reasonable wages and working hours” but chiefly because it will add to ”the confusion and uncertainty,” particularly among little businessmen, and because “there are not enough wise men in the country to perform the regulatory duties proposed.”

2) Undistributed Profits tax, ”not because it is opposed to the principle of taxing those best able to pay” but on purely economic grounds.

3) Wagner Act, not because of the principle of collective bargaining but because that one-sided measure has created rather than diminished labor disputes and needs amending.

4) Social Security, not because of any inherent dislike for social legislation but because the Act is badly drawn and in need of drastic revision.

But Business’ principal request is for reasonable certainty—the assurance that laws, policy, taxation will not change greatly between, say, the time a plant is planned and the time ii starts operating. And in approaching the peace negotiations, Mr. Chester will ask for open minds. He thinks his program is fair, social, constructive, liberal. “If it is not, we are prepared to make it so.” He wants capital and labor to recognize in advance that both employers and union leaders must “get off the back fence and act like men of intelligence before real progress can be made. … Is Government then prepared to join with business and labor and say in all frankness, ‘Well, we haven’t cared much for one member of this group, but after all, we haven’t made much headway by fighting. The situation is grave and we need most of all to forgive and forget on all sides.’ The times call for what might be termed a coalition government.”