Helping Small Business

...And mansions built upon the sands of passing power have been known to crumble...

...The social efficiency of a corporation like General Motors can never be determined by the volume of its sales or its balance sheets or profit-and-loss statements, as is now so absurdly being done...

...General Motors, which is a combination of dozens of other corporations, with sales of over $12 billion and gross profits of over $2 billion in 1955, would find it to its own advantage to decentralize into six, maybe ten companies...

...It now has 55 per cent of the automobile business, 96 per cent of the locomotive business, 75 per cent of the bus business and is a major factor in a whole line of unrelated businesses, including refrigerators, washing machines, ranges, lighting and water systems, bulldozers, etc...

...On all profits in excess of $25,000 the uniform tax rate is 52 per cent...

...But the great truth is that, under anything like fair conditions with somewhere near equal opportunities and access to raw materials, small business always could and always will give an excellent account of itself without artificial respiration...

...Small business suffers in direct proportion as monopoly and the concentration of power is allowed to dominate American enterprise...

...We cannot agree that the country will be better off without American Motors and Studebaker-Packard and their thousands of suppliers and dealers...

...The whole effect would be to encourage countless small companies, suppliers and dealers, make them more independent, broaden the base of our economic order and check the growing concentration of power at the top...

...64% Over $1 billion...

...The smaller, medium-sized companies, not the monster billionaire corporations, are the most efficient operators...

...25% $25,000 - $50,000...

...In evaluating efficiency, we must distinguish between genuine cost reductions secured by better and improved methods, on the one hand, and lower costs attained by sheer capital and market power, on the other...

...These rates could and should be revised to correspond with the principle of the graduated tax on individual incomes, as follows: Gross profit under $25,000...

...Our aim in America is the greatest good for the greatest number, not the dominance of a favored few...

...Manipulation by a new power elite has gradually taken over to a fearful extent and free enterprise has been reduced to the status of a rhetorical phrase...

...Independent firms will be swallowed up by giant corporations unless some plan--like a graduated tax system--is introduced to make decentralization attractive Helping Small Business By T K. Quinn Our genial President's recent and belated appointment of a committee of Big Business Cabinet members to study and report on the admitted tragic plight of small and independent business could have far-reaching implications...

...We are devoted to the ideal of the individual rather than to huge organization in any form...

...The trend toward the elimination and bankruptcy of small and independent business would be checked and we could expect a healthier economy and more vital democracy...

...But just as they have been artificially created by paper operations centralizing authority, so may the giants be decentralized without destroying anything except their dangerous concentrated economic power...

...40% $50,000 $100,000...

...They have led to unholy alliances between giant corporations, a press under the influence of big advertising expenditures, and big government...

...66% Some revision in this schedule may be advisable, but the principle should not be sacrificed...

...We believe the purpose of organization, economic and political, is to serve the individual, not that of the individual to serve the organization...

...57% $50 million - $100 million . . 60% $100 million $500 million 62% $500 million - $1 billion...

...We must know whether or not its thousands of suppliers and dealers are faring well and are not under domination, gentlemanly or otherwise...

...For the strength and vitality of our economy and, ultimately, of our political liberties depend upon the virility and freedom of small and independent business...

...What has drained its life blood and subordinated and darkened its future arc the continued illegal and immoral practices of Giant Business about which this author has written profusely...

...New opportunities would appear for dealers, distributors, small suppliers and other manufacturers by the tens of thousands...

...The marked absence of any representative of small business on the committee is especially noteworthy, and we can only hope that the move is something more than a political gesture in this election year...

...Economic abuses of our democratic system have permitted the swelling of giant corporations principally through mergers and acquisitions, not by "natural growth" as is so commonly misrepresented...

...We know that the most promising prospect for new invention, creative development and a better world is now, as it always has been, in diversity, individuality and freedom...

...50% $1 million - $10 million...

...Only in this way can we discourage further giantism where it hurts most...

...Permanent committees of both the Senate and the House over a period of years have studied, struggled with and wept over the problems of this otherwise forgotten segment of the economy...

...The whole climate for small and independent business in America has become more and more discouraging as private power and capital force, not efficiency or individuality or economic freedom, have prevailed...

...45% $100,000 - $1 million...

...Above all, is the existence of the General Motors colossus beneficial to our democratic way of life or does its totalitarian form of organization, with self-elected and self-perpetuating officers and directors, and its gigantic market power tend further to subordinate independent business and render the individual more dependent in a regimented society...

...We acknowledge that organization is effective up to a point, but beyond that point it becomes mere white-elephant giantism, representing dangerous force that crushes individualism, makes numbers out of people and threatens our democratic institutions...

...We must know whether its terrifying mistakes result in mass unemployment (witness Detroit today...

...54% $10 million - $50 million...

...To those who would say, "You must not discourage or place limitations on giant size because it will tend to make the giants inefficient," we should reply, "First, let us define 'efficiency' and distinguish it from power, and next, let us realize that for every single giant company forced by the tax schedule to decentralize a thousand would be given new and greater opportunities to become more genuinely efficient in both the private and broader social senses...

...These excesses are gradually drying up the sources of our creative strength, strangling free enterprise, ruining smaller, more socially efficient business, and fostering monopoly...

...The help and solutions proposed have invariably proceeded in a benevolent, paternal spirit from the bottom up, much as one goes about assisting a poor or handicapped relative...

...Unless the President's committee faces up to these realities and attacks the problem at the top, we are likely to find it concluding with a meaningless report of words about pitiful little aids to small business accompanied by the usual high-sounding platitudes concerning the advisability of "doing something" to help what is presumed to be innately weak and dependent but which has, in fact, been made so only by the tolerated injustices of the powerful, giant corporations...

...We should expect that the graduated rates would drive the super-giants out of the top brackets, which is exactly what we seek to accomplish...

...Idealistically...

...We have accepted big government because we know it is our last bulwark against the power encroachments of giant private corporations that would establish a fascist regime...

...Those who think giantism inevitable and omnipotent would do well to reflect upon what would happen if a word-of-mouth campaign were started among ordinary consumers against the products of General Motors, for example, on the ground that the continued swelling of that monster corporation is endangering our democratic existence...

...We have watched with growing apprehension the swelling of giant private corporations and the growth of political government...

...We must know whether its operation is closing the door of opportunity to new ventures...

...Corporations are currently taxed at the rate of 30 per cent on profits under $25,000...

...Americans believe in the way of the democratic many rather than the aristocratic or totalitarian few...

...Decentralization could be readily accomplished without damage to anything by stock-distribution allocations in proportion to the book values of individual interests...

...Is it encouraging constructive or destructive competition...

...Industrial efficiency is an inside-the-plant matter, not one of merging scores or hundreds of factories and offices into gigantic, combination corporations...

...Heads that wear crowns do not rest easily nor do they always remain fixed...