Problems & Challenges

When the 3,500 delegates to the 61st Congress of the National Association of Manufacturers met in Manhattan last week, their avowed theme was the "new dimensions" beckoning the modern businessman. But most of the N.A.M.'s attention was devoted to such perennial targets as union activity ("encroachment on individual rights") and big government ("The termites of welfare statism eat out the foundations of our society"). When it came to exploring the new dimensions, most of the talent was imported.

Translating the importance of NATO's future into business terms, retiring NATO General Alfred M. Gruenther told the businessmen: "What is at stake in the world today is the free-enterprise system. The Soviets realize that if this system can prevail, their system is doomed to failure." To meet Communist competition, said World Bank President Eugene R. Black, U.S. business must use "energy and imagination," to expand into the underdeveloped areas of the world.

Keith Funston, president of the New York Stock Exchange, envisioned a gross national product of $600 billion by 1965, provided U.S. corporations can raise $360 billion for expansion. Funston warned that the man who should supply $30 billion of this amount--the private investor--is hindered by prohibitive taxes that have "locked in" $200 billion in unrealized capital gains that could be used for new investments. Funston called the capital gains tax "one of the harshest penalties on success this country has ever devised," suggested tax liberalization to attract more funds for investment in the nation's business future.

Incoming N.A.M. President Ernest G. (for Goodnough) Swigert of Portland, Ore, also was troubled by the tax system : "We must make a complete change in our whole theory of taxation. The tax system should be designed for raising revenue and not for reforming society." Swigert warned against adding to inflation by overstimulating production, cited "the ridiculous 1955 production race" of auto manufacturers.

An athletic 64, Swigert began his impressive business career in 1915, just out of Harvard, took time out to become a pilot in World War I, and in 1929 founded his own firm, the Hyster Co., which now employs 2,000, manufactures hoists, cranes and similar equipment. What does President Swigert think of next year's prospects for U.S. business? "I would be surprised if 1957 were as high as 1956," said he cautiously, "but I wouldn't be too surprised if I were wrong."

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