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SUNDAY, NOVEMBER 3, 1940 THE MICHIGAN DAILY

PAGE FIVE

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PAGE FIVE

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BUSINESS CONTROL
A Discussion Of Campaign Issues

measures modifying the relations of welfare of all depends on continued
business and government. At one .,ucess of the project, as reflected
aooient business is struggling to ad- in the stream of marketable product.
inst itself to the maze of rules of tt owners benefi pr
the NIRA. with its drive toward thenarly from exploitation of labor or

Burma Road Opening Termed
Diplomatic VictoryFor British

(Editor's Note: Many political ob-
servers assert that the problem of
business control is the chief issue of
the current presidential campaign.
Two discussions of the respective atti-
tudes of Mr. Roosevelt and Mr. Willkie
toward Business are herein presented.)
ROOSEVELT AND BUSINESS
By Arthur Smithies
(Department of Economics)
I have no strong partisan feelings
in the present campaign, and my
opinion has been subject to consid-
erable oscillation. At the time Mr.
Willkie was nominated I thought
that his election might be a good
thing on the sifigle ground that he
might be more successful than Mr.
Roosevelt in achieving economic re-
covery. While it would be politically
impossible for him to reverse the
social reforms of the New Deal, I
felt that if we could obtain full pros-
perity by securing the cooperation of
business that would more than com-
pensate for a standstill in reform.
The last few months have led me
to change my opinion. In the first
place I am convinced that the arma-
ments program is going to bring full
production to this country and busi-
ness is going to cooperate. No one
ever heard of a businessman refusing
an order for quick delivery because
he did not trust the Government.
Business will be flooded with orders
during the next few years. The hea-
vy industries will receive both Gov-
ernment and private orders, and the'
consumers' goods industries will boom
because of the increased spending of

tbse newly employed. We are cer-
tainiy going to have prosperity for
the du-ation of the armaments pro-
:ram, with or without Mr. Willkie.
Willkie Inexperience Noted
The second reason for my change
o opinion is the impression I have
arm of Mr. Willkie from his
ice:hes. Although I admire the
lcieal gymnastics which enable him
te endorse every part of Mr. Roose-
v It's policy and yet condemn the
whole, I can find nothing in them
to arouse my enthusiasm or stir my
imagination. I find no reason apart
from Willkie's own assurances for
believing that he can improve on Mr.
R.csevelt's own execution of his pol-
icies. And further, however sincere
his profession of faith, I am afraid
that Mr. Willkie, if elected, would
he frustrated both by his own inex-
1 erience and by powerful factions of
his essential support, which aim at
socio-political objectives very differ-
crt from those he has expressed.
The problem that transcends all
others for us is the defense of Amer-
ica. The European tragedy has
proved that defense on the home
front is as important for a nation
as the strength of its armed forces.
And defense on the home front
means that the policy of the nation
should be truly for the people. Yet
there are sinister voices in this coun-
try urging that an increase in our
armaments can only be achieved at
the expense of our standard of liv-
ing. I am convinced, and it is sta-.
istically demonstrable, that we can


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have more guns and more butter;
and the butter is as important for
cur national security as are our guns.1
Those who contend that we should
have less butter are, consciously ort
unconsciously, subordinating the
welfare and the security of the Amer-
ican people, to the interests of a
privileged section of the community.
I am confident that the point of view
I have expressed is held by the pres-
ent administration, but I have not
detected in Mr. Willkie's speeches
sufficient awareness of the1 possibil-
ity or the necessity of continuing
our advance towards social better-
ment.
Mr. Willkie insists that his under-
standing of business men willdmake
the system of free private enterprise
work. But Mr. Willkie is no more
representative of the businessmen
who produce than his supporter, Mr.1
Lewis, now is of American labor. On
the other hand, there is evidence
that Mr. Roosevelt understands Mr.
Knudsen. Like Mr. Willkie, I want
the system of free private enterprise
to work, but I cannot share his con-
fidence that, under his auspices, it
will work for the benefit of the whole
American people.
WILLKIE AND BUSINESS
By W. A. Paton
(Department of Economics)
Both candidates profess faith in
the "American system" of private
enterprise, but a vital cleavage has
become apparent. Mr. Roosevelt oc-
casionally gives lip service to private
business, but his conduct as a whole'
points in another direction. Mr.
Willkie really believes in business en-
terprise, and sees the possibility of
a forward surge in economic activity
and output, with consequent advance
of the standard of living.
The Roosevelt administration has
:mpaired the morale of business, and
thus has placed a serious obstacle in
the way of recovery and progress.1
Modern business requires long-term'
investment and planning, and such
factors have been conspicuously1
missing in recent years. Lack of
confidence is the primary explana-
tion, and this results largely from
harassing governmental action andl
fear of additional restrictive mea-
sures. Some New Deal apologists,1
admitting this condition, say businesss
discouragement has been uninten-
tional and is simply a reflection of
the uncooperative attitude of the
business community. The fact re-
mains that large and small business
men almost without exception deep-
ly distrust the Roosevelt administra-
tion. If the New Deal is actually
friendly to private business it has
been singularly clumsy in making
its attitude clear. To most observers
the record is plain: the New Deal
from the outset selected business
for its "bad boy." Many Roosevelt
cupporters confess their desire to
see private enterprise first shackled
and then replaced by some form of
socialism. In any event we face a
serious situation. The country is
in need of all the energy and re-
sourcefulness that can be mustered
by all groups, and if we are to rely
upon our present form of economic
organization something needs to be
done to dissipate the feeling of sus-
picion and fear with which the fed-
eral government is now regarded by
business.
Experipenting Condemned
The state of mind conducive to
business progress cannot be devel-
oped in the face of continuous tink-
ering and experimentation, especially
of the hit-or-miss variety. One
could hardly expect a football team
to function effectively if the rules
could be changed a dozen times dur-
ing a single game. Similarly a com-
plex business organization cannot be
expected to function effectively in
the face of a continuing flood of

maintenance of the status quo; a.
little later business is being attacked
because of its alleged agreements
and price policies of the NIRA pat-
tein. If tusinss is to do its job
well at the present time a lull in the
output of new regulatory devices is
imperative. Government-business re-
lations in their essentials must be
stabilized.
The issue of regulation versus no
regulation is a man of straw. No one
believes that business men should
conduct their affai:s with no help
or interference from government.
Complex modern business is espe-
cially dependent upon strong, stable I
government. But very different are
regulation designed to prevent anti-
social practices and regulation de-
signed to strait-5acket business and
finally to supplant private manage-
ment with governmental adminis-
trative agencies. At present we are
treading perilously close to a con-
dition under which private operation
becomes the nominal thing that it
is in Germany. Sound regulation of
business must be carefully developed,
not applied overnight by Alladin's-
lamp methods. Too, business cannot
fleurish under a mass of bureau-
cratic red-tape. Business now bears
a very heavy burden in the form of
the cost of endeavoring to comply
with regulatory procedure.
New Capital Decreased
From 1933-40 the flow of new
capital into private enterprise in the
U.S. has decreased by more than 80%
as compared with 1926-32. Fi-
nancing new private ventures has
become nearly impossible. People
with savings are not willing to com-
mit their funds to long-term busi-
ness undertakings under present
conditions. Available capital has
been largely "invested" in securities
issued to supply the funds to carry
on government activities. Thus phy-
sical facilities of business have not
been growing. A 25 to 30 billion dol-
lar impairment is estimated. Under
Mr. Roosevelt's regime, redistribution
and various boot-strap schemes to
achieve economic advantage have
been emphasized, rather than volume
of production.
Business has been retarded by the
New Deal's encouragement of an-
tagonism between owners and in-
vestors on the one hand and em-
ployes on the other. Mt. Willkie
does well to emphasize the under-
lying community of interests between
the various groups participating in,
a business undertaking. Long-run

that labor benefits primarily at the
expense of interest and dividends is
unjustified. Production makes jobs
and primarily determines real wage
levels.
Business uncertainty has also been
fostered by the New Deal's perilous
fiscal policy. Large-scale deficit fi-
nancing carries the continuing threat
of runaway inflation, with its chain
of attendant disturbances of the first
amagnitude throughout the economic
structure. No substantial and sus-
tained forward strides can be ex-
pected until determined measures
are taken to remedy this condition.
Production expansion is desperately
needed to furnish a basis for the tre-
mendous tax levies which will now
Oe nesessary, if we are to balance the
ederal hud et and escape inflation.
New Deal Failures Listed
With Mr. Roosevelt at the helm
for another four years, the outlook
for effective utilization of American
resources, for war or peace, would
not be bright. Contrasting 1933-39
with 1926-32 we find private con-
struction down over 60%, car load-
ings down nearly 30%, wages and
salaries down 20%, factory payrolls
down 12%, farm income, including
benefit payments, down 15%, de-
partment store sales down over 15%,
exports and imports down 35%, na-
tional income down 13%. Annual
level of unemployment has doubled,
number of strikes has trebled, aver-
age cost of federal government has
nearly doubled. Meanwhile the pop-
ulation has increased several mil-
lions. Ignoring the effrontery and
danger of Mr. Roosevelt's grab for
power and tenure, the economic rec-
ord does not justify his retention in
office. If we admit an urgent need
for throwing our industrial mech-
anism into high gear, the election of
Mr. Willkie becomes imperative. He
is a vigorous executive with first-
hand acquantance with the problems
of business organization and produc-
tion. He has the courage and opti-
mism, the faith in American enter-
prise, needed to restore a hopeful
note to the economic scene. With
such a man at the head of the gov-
ernment there would be good pros-
pect of regenerating and fusing our
productive abilities for the difficult
task ahead.
Maker Is Elected
Charles Maker, Grad., was elected
president of Hinsdale Residence Hall
Thursday night, Prof. Joseph E. Kal-
lenbach announced yesterday.

By ROSEBUD SCOTT
Reopening of the Burma Road last
month was a British diplomatic vic-
tory which will preserve China's main
artery of trade and especially her
flow of military goods despite heavy
bombing by the Japanese, Dr. Robert
Ellsworth Brown, medical supervisor
for the Chinese government who re-
turned recently from the Far East,
commented in an interview here yes-
terday.
The 700-mile motor road running
from the Burma border to Kunming
in free China was restored to trade
when the Japanese failed to carry
out their part of the agreement
reached with the British in July.
When the Japanese failed to come to
terms with the Chinese, the British
concluded their three-month period
of closing of the road. In addition,
he declared, the Road was closed
during the monsoon period, the rainy
season when the road is of least use.
The Chinese took advantage of
this opportunity to repair the high-
way in places where it had become
defective since its construction in
1938, As a result, Dr. Brown pointed
out, the lifeline of China is strongerl
now than it ever was.
Bombing by the Japanese will prove
ineffectual against the mountainous

roadway, he maintained. With air
bases nearer than present ones are
to the Burma Road, the Japanese
bombed the Canton-Hankow railway
continuously for one year with no
serious affect on transportation. The
Road running mostly through moun-
tainous territory is distant from Jap-
an's newly-acquired bases in French-
Indo-China.
Where the highway crosses the
Mekong and Salweng Rivers, the
Japanese could possibly inflict dam-
ages to bridges. No more than tem-
porary delay would result, he indi-
cated. The resourceful Chinese could
easily use ferry and pontoon trans-
portation here, Dr. Brown said.
The recent friendly gesture of the
United States of a $25,000,000 lean
to the Chinese government as an ad-
vance on shipments to this country of
tung oil necessary to good varnishes
was made practicable by the renewed
exportation through the Burma Road,
he cited. The shipment abroad from
China of silks, teas, tung oil and
medicinal herbs is possible primar-
ily through the Burma Road and
British Rangoon.
With this exchange of goods, the
Chinese are better able to purchase
the medical supplies which they need.

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