A Jarring Note

Meeting in Manhattan last week, 2,000 delegates to the 64th Congress of the National Association of Manufacturers were fully prepared, as usual, for a series of speeches attacking high taxes. At the opening session they were jarred out of position by IBM President Thomas J. Watson Jr. He told them flatly that high taxes are essential in the struggle with Russia for world leadership.

"We must realize," said Watson, "that the Communists are fully committed to the contest for the underdeveloped nations, while at times it appears that we haven't really decided whether we are competing or not. We must realize that some sacrifice is necessary. We can't do all the things necessary for the U.S. to do --in this country and abroad--and still proceed on the 'business-as-usual' basis. One of our first sacrifices must be a willingness to accept higher taxes, if necessary, in order to accomplish our purpose of keeping America ahead of the world on all counts. We won't do it with fizzling rockets or lowered taxes or something for everyone."

Echoing Watson's remarks, Allen Dulles, director of the Central Intelligence Agency, cautioned that in the struggle for the uncommitted nations, Russia had a "subversive arsenal of organizations which use the slogans of peace, friendship and coexistence. We have not answered the challenge if we limit ourselves merely to meeting the Kremlin's military threat." Watson's speech was greeted with some restraint. Later, it was liberally interpreted (Watson left for Europe immediately after the speech) by incoming N.A.M. President Rudolf F. Bannow, president of Bridgeport (Conn.) Machines, Inc. to mean that "if you give the economy more push, it will produce more taxes automatically." Bannow went on to say that "taxes should be such as to encourage business," and plugged the N.A.M. program for reducing taxes to 47% maximum on individual and corporate income. Such tax reforms would put "enough incentive into the bloodstream of business to produce even greater Government revenue than we have now."

There was more unanimity on the N.A.M.'s contention that labor featherbedding threatens the U.S.'s competitive position in world trade. "It is a plain economic fact," said Sinclair Oil Vice President Millard E. Stone, "that the country can no longer afford to let management be handcuffed by archaic work rules which prevent maximum efficiency, nor by the kind of uneconomic wage increases which subject the public to further inflationary pressures. Our continued failure to recognize the impact of labor costs on our competitive standing has brought us to the point where we stand to lose our domestic and foreign markets." sbsbsb

The N.A.M.'s new president was born in Gothenburg, Sweden in 1897, emigrated to the U.S. in 1910. Completing grammar school in Holyoke, Mass., Bannow went to work as an apprentice patternmaker in 1911 at 6 1/2-c- an hour ("I was grossly underpaid"). In 1919 he shipped around the world for a year as a coal stoker on a freighter ("I had to get that phase out of my system"). At 30, he bought Bridgeport Pattern and Model Works with "$80 and a $3,000 loan,'1 changed its name to Bridgeport Machines, Inc., and went to work manufacturing milling machines. The company now has 400 profit-sharing, nonunion employees, is worth $6,500,000. Married and the father of two daughters, Bannow sings a rousing first bass in a Bridgeport male chorus, the North Star Singers, has given up soccer with Bridgeport's Swedish Athletic Club to play golf. Traveling with his wife, he will spend two weeks out of four on the road next year on N.A.M. projects. In talks on inflation, he will emphasize to his audience that he has raised his prices only once in the last 20 years.

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