June 6, 1950
Mr. Chairman:
I am glad to have this opportunity to talk to a group of businessmen from all over the country. I want to congratulate those prizewinners, and I want to congratulate those who awarded the prizes. It certainly is a step in the right direction for the welfare of business and for the welfare of the country. I am particularly happy to meet and talk with a group of this kind, which is so deeply concerned with the relations between business and the public. It is important to the welfare of the Nation to have understanding and mutual confidence between business and the public which business serves.
It is one of the purposes of the Better Business Bureaus, I understand, to help create that kind of relationship. And I think they have gone at it in the right way. Your bureaus have not relied on propaganda extolling the virtues of business. They have gone to work to clean out the shady areas in the commercial world. They have set out to give real meaning to their slogan: "Private Enterprise in the Public Interest"-private enterprise in the public interest!
Some people talk longingly about the "good old days" of business. They tend to forget that business in those good old days was often marred by fraud, false advertising, and other sharp practices. I think these Better Business Bureaus have made a wonderful contribution in virtually removing that old English common law phrase "caveat emptor."
Business in the old days did not have the ethical standards which it has now. The growth of high standards for business has been greatly aided by the Better Business Bureaus. In this way, you men gathered here have done a great deal to strengthen our system of free enterprise.
There was a time when the slogan of this organization, "Private Enterprise in the Public Interest," would not have been popular among businessmen. They would have resisted it as vigorously, if not quite as bluntly, as old W. H. Vanderbilt did when he said, "The public be damned!" We have come a long way since that time. The tycoons of those days believed in the right of business to rule the rest of the community. They believed in the divine right of business in the same way that men used to believe in the divine right of kings.
But the belief in the divine right of business was completely discredited by the great depression, and it has never come back. Today, people know that no single group has the right to rule the whole community. We know that all our major groups--business, agriculture, and labor-must work together for the interest of all.
The prosperity of business depends upon the prosperity of the farmer and the wage earner. They are its customers. And if its customers are having hard times, business will suffer. Nobody knows that any better than I do. It is to the advantage of business, therefore, to see that the purchasing power of the other groups is kept up. That is a very simple truth, but it has taken some of our citizens a long time to learn it. Some of them have not learned it yet. But most of us have, and as a result our whole national economy is healthier and sounder.
At the same time that we have been learning that private enterprise must serve the public interest, we have been learning that action by the Government is necessary at times to help make the private enterprise system work.
I know that you have been hearing a lot of charges lately about Government interference with business, about the undermining of the free enterprise system, and about "creeping socialism." In short, you have been hearing that the Government is doing everything possible to wreck every industry in the country.
Nothing could be further from the truth. The record shows that the Government action in recent years has been the salvation of private enterprise.
All you have to do is to remember the conditions in 1932 and compare them with conditions today. In 1932 the private enterprise system was close to collapse. There was real danger then that the American people might turn to some other system. The private enterprise system was in danger because it was failing to meet the needs of our people. The only way to preserve the private enterprise system was to make it work. That is what we have been doing since 1932.
But, how successful have we been? Let us look at the record.
Private enterprise today is strong and flourishing. Industrial production is three times what it was in 1932. Corporate business as a whole lost more than $3 billion in 1932. Today, corporate profits, after taxes-after taxes--are at the rate of more than $18 billion a year. That very same condition could prevail today with the Government if the men responsible for our tax policy were realistic and would meet changed conditions in the world as we must meet those conditions.
I know there are some people who still don't believe that the policies of the Government have had anything to do with our present prosperity. That reminds me of a story I heard on my recent nonpolitical trip. It seems that there was a rock-ribbed old gentleman of a political persuasion, shall we say, somewhat different from mine. One of his friends asked him what man to vote for for President in 1952.
"Well," he said, "I would like to vote for Dewey."
"Dewey!" said the friend. "Why Dewey?"
"Well," he said, "I voted for him the last two times, in 1944 and in 1948, and business has never been so good as it is today."
My own belief is that the Government is entitled to part of the credit for the good times we are enjoying. I also believe that business is entitled to credit, and so are labor and agriculture. I think the great lesson we have learned is that we can all work together for our mutual benefit--that each of us has a proper part to play in keeping our economy strong and healthy.
Our whole economy has been strengthened by the progress which the Government has followed during the last 17 years. This program has included such measures as loans to business, bank deposit insurance, and regulation of security markets. It has included old-age and unemployment insurance, minimum wages, slum clearance, and low-rent housing. It has included resource development and progressive agricultural legislation. Such measures as these have given stability to the economy, they have broadened the distribution of purchasing power, and they have provided an economic climate in which private enterprise can and does flourish.
All this has been accomplished in the face of the greatest and most persistent campaign of propaganda that this country has ever known. This propaganda campaign has been directed against the Government action for the benefit of the people. It has been designed to undermine the belief of the people in their Government. It has tried to frighten the people away from using the powers of the Government for their own good. Year after year, it has asserted that the policies we were following would lead straight to disaster.
Why, just the other morning I saw in one of our local morning papers that the steel industry was proceeding at 101 percent of its capacity, and that the country was going to hell because they just couldn't do that!
This propaganda campaign has been backed by enormous amounts of money. But it has failed. It has failed to shatter the confidence of the people in their Government. It has failed to terrify businessmen or dampen their courage and initiative.
It has failed because it was essentially false. The plain fact, evident to every citizen, is that the policies we have been following have led not to disaster, but to progress and prosperity.
In spite of this fact, the campaign of propaganda is being stepped up this year. You know why, of course! They still don't believe in 1948! We are all being deluged with it. There are books, and columns, and advertisements, and pamphlets, and broadcasts, and chain letters, all telling us that the Republic is in peril, and that we are on the last mile, that socialism lies just ahead.
The funny thing is that this has all been said before. The current campaign is almost exactly like the campaign of the old Liberty League, back in 1935 and 1936. I was in that campaign, too, by the way. It uses the same old slogans, the same old scarewords, and the same old falsehoods. The only difference is that it sounds even more foolish now than it did 14 years ago.
On my recent nonpolitical trip, I noticed very, very little wreckage and ruin around the country. I saw no grass growing in the streets. Instead, I saw industrious, hardworking citizens, happy homes, new businesses, growing communities. I visited a part of the country that has experienced a phenomenal expansion and development in the last 10 years--due in large measure to the constructive policies relating to natural resources and agriculture that this Government has been following. I did not find socialism. I found a tremendous increase of normal, American business enterprise.
When I saw these things, I thought of the great changes that have taken place in this country in recent years. We have witnessed developments that make the outcries of the old Liberty League, and its present-day imitators, completely ridiculous. We have proved that the powers of the Government can be used for the good of the whole people. We have proved that the major groups in our country can work together for the good of all.
In the early 1930's our farmers were overwhelmed by debt and despair. Today, we have the most productive and prosperous agriculture in the history of the world.
In the early 1930's our labor union movement was struggling for recognition. Today it is the largest movement of free trade unions in the world, with a recognized place and responsibility in the councils of the Nation.
In 1932 our system of business enterprise was under attack and uncertain of its own future. Today, it is stronger than it has ever been before.
If you want this picture in a nutshell--our national output in 1932 was less than $60 billion. Today, it is more than $260 billion.
Since 1932 this country has progressed not toward socialism, but toward greater prosperity and freedom for all. The use of the powers of the Government for the good of all has not led to regimentation. Instead, it has released what Woodrow Wilson called, and I quote: "the splendid energies of a great people who think for themselves."
And in this period we have learned another great lesson. We have learned the lesson that there is a lot of room in our expanding economy. We have learned that if our economy continues to expand there is room for the legitimate activities and ambitions of us all.
This lesson, too, knocks the props out from under the arguments of the reactionaries, because their arguments are the arguments of defeatism. They are based upon a narrow vision of the future--upon a belief in a static and shrinking economy.
Let me give you just a few examples.
In the early days of the New Deal, social security was opposed by the private insurance companies, because they believed that it would take business away from them. Just the opposite has proved to be the case. The social insurance maintained by the Government has been a spur and a stimulus to the private insurance business. Today, there are 65 million more private insurance policies than there were in 1936--a 50 percent increase.
Take another example--the private power companies opposed the building of hydroelectric facilities by the Federal Government. And I want to say to you that if these hydroelectric facilities had not been built on the Columbia and the Tennessee Rivers, we would have lost this war. They said that the Government dams would put the private companies out of business. But just the opposite has proved to be the case. Lowcost public power has helped to broaden the power market and encourage industrial growth. This has meant bigger markets for the private power companies, and they have increased their capacity from 32 million to 50 million kilowatts since 1933--nearly a 60 percent increase.
Today, we have learned that these Government activities--such as social insurance and hydroelectric development--do not harm business. Instead, they increase the wealth of all, and in that way they increase the opportunities of all business.
We have an expanding economy now. We must continue to have an expanding economy. Every year sees a larger population of the United States. As our population increases, our needs increase.
Furthermore, our industry and agriculture can and should produce more abundantly every year. New inventions, new machines, new methods constantly increase the productivity of American industry. With these increases in productivity, the real wages of our workers can and should increase. They will then be able to buy more and to lead better lives. To satisfy their needs will require more business investment and more new and independent businesses every year.
I have recently recommended to the Congress certain measures that will help to channel more private capital into smaller enterprises and new investments. These measures will help our economy to maintain a constant and steady rate of growth.
Congressional hearings are beginning next week on legislation to carry out these proposals. I very much hope the legislation will be passed before the Congress goes home. It will mean a lot to several million small and medium-sized businesses and to the people who are working for them.
There are some politicians and commentators who have been making fun of the idea that our economy has to grow continually. They have been calling it unrealistic and foolish. But it doesn't appear foolish to responsible leaders of
Mr. Chairman:
I am glad to have this opportunity to talk to a group of businessmen from all over the country. I want to congratulate those prizewinners, and I want to congratulate those who awarded the prizes. It certainly is a step in the right direction for the welfare of business and for the welfare of the country. I am particularly happy to meet and talk with a group of this kind, which is so deeply concerned with the relations between business and the public. It is important to the welfare of the Nation to have understanding and mutual confidence between business and the public which business serves.
It is one of the purposes of the Better Business Bureaus, I understand, to help create that kind of relationship. And I think they have gone at it in the right way. Your bureaus have not relied on propaganda extolling the virtues of business. They have gone to work to clean out the shady areas in the commercial world. They have set out to give real meaning to their slogan: "Private Enterprise in the Public Interest"-private enterprise in the public interest!
Some people talk longingly about the "good old days" of business. They tend to forget that business in those good old days was often marred by fraud, false advertising, and other sharp practices. I think these Better Business Bureaus have made a wonderful contribution in virtually removing that old English common law phrase "caveat emptor."
Business in the old days did not have the ethical standards which it has now. The growth of high standards for business has been greatly aided by the Better Business Bureaus. In this way, you men gathered here have done a great deal to strengthen our system of free enterprise.
There was a time when the slogan of this organization, "Private Enterprise in the Public Interest," would not have been popular among businessmen. They would have resisted it as vigorously, if not quite as bluntly, as old W. H. Vanderbilt did when he said, "The public be damned!" We have come a long way since that time. The tycoons of those days believed in the right of business to rule the rest of the community. They believed in the divine right of business in the same way that men used to believe in the divine right of kings.
But the belief in the divine right of business was completely discredited by the great depression, and it has never come back. Today, people know that no single group has the right to rule the whole community. We know that all our major groups--business, agriculture, and labor-must work together for the interest of all.
The prosperity of business depends upon the prosperity of the farmer and the wage earner. They are its customers. And if its customers are having hard times, business will suffer. Nobody knows that any better than I do. It is to the advantage of business, therefore, to see that the purchasing power of the other groups is kept up. That is a very simple truth, but it has taken some of our citizens a long time to learn it. Some of them have not learned it yet. But most of us have, and as a result our whole national economy is healthier and sounder.
At the same time that we have been learning that private enterprise must serve the public interest, we have been learning that action by the Government is necessary at times to help make the private enterprise system work.
I know that you have been hearing a lot of charges lately about Government interference with business, about the undermining of the free enterprise system, and about "creeping socialism." In short, you have been hearing that the Government is doing everything possible to wreck every industry in the country.
Nothing could be further from the truth. The record shows that the Government action in recent years has been the salvation of private enterprise.
All you have to do is to remember the conditions in 1932 and compare them with conditions today. In 1932 the private enterprise system was close to collapse. There was real danger then that the American people might turn to some other system. The private enterprise system was in danger because it was failing to meet the needs of our people. The only way to preserve the private enterprise system was to make it work. That is what we have been doing since 1932.
But, how successful have we been? Let us look at the record.
Private enterprise today is strong and flourishing. Industrial production is three times what it was in 1932. Corporate business as a whole lost more than $3 billion in 1932. Today, corporate profits, after taxes-after taxes--are at the rate of more than $18 billion a year. That very same condition could prevail today with the Government if the men responsible for our tax policy were realistic and would meet changed conditions in the world as we must meet those conditions.
I know there are some people who still don't believe that the policies of the Government have had anything to do with our present prosperity. That reminds me of a story I heard on my recent nonpolitical trip. It seems that there was a rock-ribbed old gentleman of a political persuasion, shall we say, somewhat different from mine. One of his friends asked him what man to vote for for President in 1952.
"Well," he said, "I would like to vote for Dewey."
"Dewey!" said the friend. "Why Dewey?"
"Well," he said, "I voted for him the last two times, in 1944 and in 1948, and business has never been so good as it is today."
My own belief is that the Government is entitled to part of the credit for the good times we are enjoying. I also believe that business is entitled to credit, and so are labor and agriculture. I think the great lesson we have learned is that we can all work together for our mutual benefit--that each of us has a proper part to play in keeping our economy strong and healthy.
Our whole economy has been strengthened by the progress which the Government has followed during the last 17 years. This program has included such measures as loans to business, bank deposit insurance, and regulation of security markets. It has included old-age and unemployment insurance, minimum wages, slum clearance, and low-rent housing. It has included resource development and progressive agricultural legislation. Such measures as these have given stability to the economy, they have broadened the distribution of purchasing power, and they have provided an economic climate in which private enterprise can and does flourish.
All this has been accomplished in the face of the greatest and most persistent campaign of propaganda that this country has ever known. This propaganda campaign has been directed against the Government action for the benefit of the people. It has been designed to undermine the belief of the people in their Government. It has tried to frighten the people away from using the powers of the Government for their own good. Year after year, it has asserted that the policies we were following would lead straight to disaster.
Why, just the other morning I saw in one of our local morning papers that the steel industry was proceeding at 101 percent of its capacity, and that the country was going to hell because they just couldn't do that!
This propaganda campaign has been backed by enormous amounts of money. But it has failed. It has failed to shatter the confidence of the people in their Government. It has failed to terrify businessmen or dampen their courage and initiative.
It has failed because it was essentially false. The plain fact, evident to every citizen, is that the policies we have been following have led not to disaster, but to progress and prosperity.
In spite of this fact, the campaign of propaganda is being stepped up this year. You know why, of course! They still don't believe in 1948! We are all being deluged with it. There are books, and columns, and advertisements, and pamphlets, and broadcasts, and chain letters, all telling us that the Republic is in peril, and that we are on the last mile, that socialism lies just ahead.
The funny thing is that this has all been said before. The current campaign is almost exactly like the campaign of the old Liberty League, back in 1935 and 1936. I was in that campaign, too, by the way. It uses the same old slogans, the same old scarewords, and the same old falsehoods. The only difference is that it sounds even more foolish now than it did 14 years ago.
On my recent nonpolitical trip, I noticed very, very little wreckage and ruin around the country. I saw no grass growing in the streets. Instead, I saw industrious, hardworking citizens, happy homes, new businesses, growing communities. I visited a part of the country that has experienced a phenomenal expansion and development in the last 10 years--due in large measure to the constructive policies relating to natural resources and agriculture that this Government has been following. I did not find socialism. I found a tremendous increase of normal, American business enterprise.
When I saw these things, I thought of the great changes that have taken place in this country in recent years. We have witnessed developments that make the outcries of the old Liberty League, and its present-day imitators, completely ridiculous. We have proved that the powers of the Government can be used for the good of the whole people. We have proved that the major groups in our country can work together for the good of all.
In the early 1930's our farmers were overwhelmed by debt and despair. Today, we have the most productive and prosperous agriculture in the history of the world.
In the early 1930's our labor union movement was struggling for recognition. Today it is the largest movement of free trade unions in the world, with a recognized place and responsibility in the councils of the Nation.
In 1932 our system of business enterprise was under attack and uncertain of its own future. Today, it is stronger than it has ever been before.
If you want this picture in a nutshell--our national output in 1932 was less than $60 billion. Today, it is more than $260 billion.
Since 1932 this country has progressed not toward socialism, but toward greater prosperity and freedom for all. The use of the powers of the Government for the good of all has not led to regimentation. Instead, it has released what Woodrow Wilson called, and I quote: "the splendid energies of a great people who think for themselves."
And in this period we have learned another great lesson. We have learned the lesson that there is a lot of room in our expanding economy. We have learned that if our economy continues to expand there is room for the legitimate activities and ambitions of us all.
This lesson, too, knocks the props out from under the arguments of the reactionaries, because their arguments are the arguments of defeatism. They are based upon a narrow vision of the future--upon a belief in a static and shrinking economy.
Let me give you just a few examples.
In the early days of the New Deal, social security was opposed by the private insurance companies, because they believed that it would take business away from them. Just the opposite has proved to be the case. The social insurance maintained by the Government has been a spur and a stimulus to the private insurance business. Today, there are 65 million more private insurance policies than there were in 1936--a 50 percent increase.
Take another example--the private power companies opposed the building of hydroelectric facilities by the Federal Government. And I want to say to you that if these hydroelectric facilities had not been built on the Columbia and the Tennessee Rivers, we would have lost this war. They said that the Government dams would put the private companies out of business. But just the opposite has proved to be the case. Lowcost public power has helped to broaden the power market and encourage industrial growth. This has meant bigger markets for the private power companies, and they have increased their capacity from 32 million to 50 million kilowatts since 1933--nearly a 60 percent increase.
Today, we have learned that these Government activities--such as social insurance and hydroelectric development--do not harm business. Instead, they increase the wealth of all, and in that way they increase the opportunities of all business.
We have an expanding economy now. We must continue to have an expanding economy. Every year sees a larger population of the United States. As our population increases, our needs increase.
Furthermore, our industry and agriculture can and should produce more abundantly every year. New inventions, new machines, new methods constantly increase the productivity of American industry. With these increases in productivity, the real wages of our workers can and should increase. They will then be able to buy more and to lead better lives. To satisfy their needs will require more business investment and more new and independent businesses every year.
I have recently recommended to the Congress certain measures that will help to channel more private capital into smaller enterprises and new investments. These measures will help our economy to maintain a constant and steady rate of growth.
Congressional hearings are beginning next week on legislation to carry out these proposals. I very much hope the legislation will be passed before the Congress goes home. It will mean a lot to several million small and medium-sized businesses and to the people who are working for them.
There are some politicians and commentators who have been making fun of the idea that our economy has to grow continually. They have been calling it unrealistic and foolish. But it doesn't appear foolish to responsible leaders of