THE BIG DEAL
Shelton, Willard
The Big Deal By Willard She/fen IT IS clear to callers at the White House that President Eisenhower resents, quite understandably, any suggestion that his Administration may turn into what Adlai...
...no establishment of new regulatory agencies to protect consumers from price-gouging...
...In 1952 President Truman could not even get Senate consideration for the renomination of Thomas Buchanan, the only FPC member who actually voted in 1951 for the regulation of the Phillips company...
...It exists in the widely-observed phenomenon that practically all of the President's advisers were summoned from the top-drawer ranks of industry, management, and corporation lawyers...
...that "interference" with the economic system by the government is WILLARD SHELTON is a Washington correspondent who has reported most of the major develop' ments in the nation's capital for more than a decade...
...There is great danger here for the business community itself...
...Truman then gave Buchanan a recess appointment...
...that tax incentives should be awarded the well-to-do rather than the middle-income and low-income families...
...Whether President Eisenhower withdraws it or submits Buchanan's name once more to the new Senate will be one revealing sign of how much the Administration is likely to turn into a "big deal...
...Some of the businessmen appointed by Mr...
...Let Mr...
...Spingarn's term expires later this year...
...Eisenhower has shown signs of retreating from certain early errors that brought immediate challenge of his program...
...A hasty message went from the White House to request a deficiency appropriation for the CEA staff and additional funds for operating the Council next year as well...
...Others, like the unfortunate Wilson, treated the Senators condescendingly, and they face a parlous future...
...There is the matter of the administrative agencies, which in ordinary times perform much of the vital work of the government...
...The Hanna Company acquired an interest in Labrador ore-fields, and hence an interest in getting the government to pay the costs of a seaway to the Midwest, whereas previously it had an interest in blocking the seaway...
...It persuades a President to appoint some likely-sounding fellow who turns out to be an industry stooge...
...and a very bad deal, by applying the doctrine of some Republican Old Guardsmen that not only the offshore oil lands but also the mineral and grazing rights in public lands in the interior states should be relegated to the weak protection of state legislatures...
...In 1950 the Senate refused confirmation to Leland E. Olds, who was suspected of thinking that the FPC had power to regulate the Phillips Petroleum Co...
...The country heard no more of Woodrow Wilson's nonsense about the New Freedom...
...It could become a "big deal...
...II It is noteworthy that the President's selection of monied men for most of the key assignments is paralleled on lower echelons of the establishment of advisory boards wholly dominated by men of great wealth...
...no more reforms in the banking system...
...What was the reason for the change...
...The Big Deal By Willard She/fen IT IS clear to callers at the White House that President Eisenhower resents, quite understandably, any suggestion that his Administration may turn into what Adlai Stevenson called a "big deal," merely because it is populated by some 40 or 50 millionaires and a plumber...
...The Administration could become a "big deal" through its military procurement policies, with big corporations getting even more of the gravy from defense contracts than they got during World War II, when the concentration of economic power was enormously increased...
...Robert A. Taft has already proposed for the National Labor Relations Board...
...The Eisenhower Administration could turn into a "big deal" exactly the way the Mellon-dominated Administrations became big deals—by giving policy-making power to business men whose ideas of government remain unchanged when they shift into public jobs...
...A federal sales tax is the application of the Mellon philosophy of government...
...If Mr...
...Louis Star-Times, and PM...
...A classic instance is the absolute reversal in Federal Power Commission doctrine worked by the Senate...
...Eisenhower — notably Secretary of the Treasury George M. Humphrey—made an excellent impression on the practiced politicians whose consent was necessary for confirmation...
...The nation's resources were fraudulently leased to oil companies...
...Carson is a consumers' man, a supporter of FTC Commissioner Stephen Spingarn, who thinks that the regulatory agencies ought to fulfill their function of regulating...
...Rep...
...Durkin is allowed to do in his job...
...Just the business crowd...
...The one thing they have in common—Humphrey and Wilson and the others—is that they are big business men...
...John Taber's "advisory" gi;oup of assistants to the House Appropriations Committee is drawn from the identical ranks of businessmen, business lawyers, and management consultants that Stassen leans on...
...One wonders, under the circumstances, what Mr...
...How could it be supposed, he asked at an early news conference, that he was unconcerned with the general welfare of all our 158 million people or that he favored business as a group merely because he had appointed a lot of competent businessmen to office...
...Former Sen...
...A definition of terms may help us understand the stakes involved...
...Some of the symptoms would be the same as during the Twenties—application of the notion that the federal government should get out of the way and...
...It is not inappropriate to ask whether Mr...
...Secretary of the Interior McKay disappointed some wild-eyed states' righters, including the potent Texans, by testifying that while he thought the coastal states deserved control of tidelands oil within their "historic" limits—that is, within the three-mile limit or, in the case of Texas the ten-mile limit —all oil in the further seas, to the edge of the continental shelf, was under federal domain...
...President Eisenhower likes to think of himself as a "Middle Way" American...
...Whether or not he likes it, Mr...
...It could become a "big deal," and a bad one, by making free enterprise such a fetish that federally produced power would be exploited primarily by private utilities rather than used for the benefit of the ultimate consumers...
...during the time that company, a powerful one, first opposed and then endorsed the St...
...Earlier Mr...
...Eisenhower is going to have to learn a great deal, very quickly, about the meaning of the phrase, "the general welfare," and what is a true "Middle Way," to prevent his Administration from being dominated by the big dealers he himself has elevated to power...
...The Republican Old Guard can seize control of the regulatory agencies at once by the simple trick of enlarging them, and thus creating vacancies to be filled, as Sen...
...Taber would think the notion absurd...
...It includes not a single union leader, farm cooperative adviser, or spokesman for consumer groups...
...let entrepreneurs do their job...
...The former general counsel of the NLRB, Robert N. Denham, now an industry lobbyist, blandly proposed that the entire present board and staff be abolished as too much "pro-labor," and that a new one be set up to administer a law more hostile to unions than the Taft-Hartley Act...
...His articles on public affairs have appeared in The Nation, The New Republic, The Reporter, and The Rotar-ian...
...There was a worship of "free enterprise," so that power produced at the government's Muscle Shoals project was peddled to a private utility rather than ultimate consumers, and Sen...
...Lawrence Seaway...
...A labor adviser...
...The "big deal" of Andrew Mel-Ion's days in the Treasury Department, when for practical purposes Mellon ran the government during the sky's-the-limit Twenties, was identified both at the time and in perspective by certain habits: • Tax rebates were handed to big corporations...
...President Eisenhower has already withdrawn Mr...
...But to remove the federal government as a powerful influence in the nation's economic life would be to reject the genuine "middle way" reforms that have made the Scandanavian countries modern and highly democratic states, and turn America back to the Old Guard times of Mellon, Boss Penrose, and William McKinley...
...Another evidence of retreat from a total "big deal" approach was on display in the delicate field of tide-lands oil...
...that the anti-trust laws may be all right on paper so long as they are not enforced...
...Randolph Burgess, is a "hard money" man who doesn't mind raising interest rates, and squeezing both the taxpayer and the money consumer, because he holds to the "classic" belief that the way to control the economy is through monetary policy...
...An adviser who believes in public housing...
...Eisenhower give his businessmen advisers their heads or let the Old Guard Republicans in Congress suddenly feel the absence of Wliite House restraints, and the country will be off to the races...
...as evil as Calvin Coolidge thought it when he vetoed the McNary-Haugen bill...
...Humphrey made a good impression on the Senate Finance Committee, it is still true that his handpicked undersecretary, Marion Bayard Folsom, ran the Committee for Economic Development when that relatively progressive council of businessmen endorsed a federal sales tax as a substitute for special excises and high income tax rates...
...There were no more reforms in the antitrust laws to protect unions from misapplication of the statutes...
...Truman's renomination of John Carson for a new term on the Federal Trade Commission...
...That was not true under the enlightened leadership of Paul Hoffman in the earlier Economic Cooperation Administration, yet even then the most devastating criticism of ECA was that American money poured into the West Europe economies benefited chiefly the owning class...
...Most of the offshore oil, ironically enough, is beyond the "historic limits" of the states...
...The danger that this Administration will become a "big deal" is clear and present...
...Tax policy favored "incentive"—that is, the incentive of the few large money-makers rather than the many low-paid workers, farmers, and consumers...
...Shelton worked for a number of newspapers, including The Chicago Sun, The St...
...It is estimated that the defeat of Olds and Buchanan in the Phillips case, which freed that company from federal regulation of its natural gas rates, added hundreds of millions of dollars to the company's earning potential—and to gas consumers' bills...
...It exists in Charles E. Wilson's naive suggestion to the Senate Armed Services Committee that "what is good for General Motors is good for the country," and vice versa...
...These matters are not yet definitive in revealing the Administration's course...
...Some of their wives have not yet stopped telling their friends what a "terrible thing" it is for the government to ask officials to own no stock in firms with which they must transact government business...
...George Norris almost singlehandedly had to block sale of the whole Muscle Shoals project to private business...
...They have been dominating figures in, or spokesmen for, some dozens of the country's most powerful corporations, and there is nothing in their backgrounds to suggest that they ever understood the political forces and the people's urgencies which invigorated the New Deal...
...Somebody discovered that this would violate both the letter and spirit of the Employment Act of 1946 and by implication repudiate the statute itself...
...There was no federal farm relief in the Twenties, even when farmers were losing their land in wholesale batches...
...Humphrey's special deputy and consultant on debt management, Mr...
...When a reform mood fades, industry gangs up to take control of the agency whose creation it could not originally prevent...
...Burton K. Wheeler is authority for the observation that every regulatory agency tends to fall under rhe control of the industry it was intended to regulate...
...A bet that he will be reappointed by Mr...
...Apparently he was prepared to kill the Council of Economic Advisers and rely, in the economic field, on the personal proposals of a one-man brain trust...
...that too little "trickled down" to workers and farmers in the form of better wages, better living conditions, a larger share in the fruits of higher productivity...
...Harold E. Stasson is perhaps the worst offender...
...Demoralize the small business man and independent farmer, stack the membership of the regulatory agencies, weaken the enforcement of the antitrust laws, turn back to the total laissez [aire doctrines that are outmoded in an industrialized capitalistic democracy, abandon or emaciate the principle of federal control of natural resources, create no new Tennessee Valley Authorities and undermine the one we have, turn over defense procurement policy to the spokesmen of big industry, tighten up credit and raise interest rates sharply—and the "big deal" will be in full operation...
...The men from the corporations and the banks cannot be assumed to have automatically shed their habits of thinking just because they have been obliged to sell some stock and take a "tax loss" on their capital gains...
...Let this Administration fail in its job of promoting the general welfare, and there will be no one to blame but the business group...
...Enactment of a farmers' assistance bill, to help market our surpluses abroad, was held to violate the most sacred credo of our system—the inalienable right of each farmer to lose his shirt and become an insurance company's tenant or a sharecropper—so the McNary-Haugen bill was twice vetoed...
...Failing that, it persuades a now-changed Senate to reject the appointment of agency members who have the silly notion that the original intent of Congress—to protect consumers— is still the intent...
...Eisenhower would go begging at odds of 100 to 1. The Administration can be turned into a "big deal" not only through the process of Presidential appointment as terms expire...
...Humphrey, in the Treasury, can now think in terms of the general welfare—not the welfare of the M. A. Hanna Co., or even a "much larger single segment of the American economy...
...Truman, to give the coastal states a big share of royalties from offshore oil production even beyond their seaward "historic limits...
...This reporter would add a cai>ear: the reason for the historical deterioration of regulatory agencies is a change in the temper of the Administration or the Congress...
...It remains to be seen whether the President would sign or veto a bill, comparable to the last one vetoed by Mr...
...His teams to study Mutual Security Administration operations consist of 55 businessmen and business lawyers...
...It exists in the fact that the one "plumber" in the Administration, Secretary of Labor Durkin, announced rather promptly that he would not personally propose any revisions of the Taft-Hartley Act but would let any such proposals come from higher administrative authority...
...Humphrey, the amiable and self-possessed Secretary of the Treasury who had no trouble with the Senate Finance Committee, nevertheless presided over the destinies of the M. A. Hanna Co...
Vol. 17 • April 1953 • No. 4
