The Expense-Account Society

The whole rationale of the expense-account society--aside from the benefits reaped by free-spenders of the company's money--is that the uninhibited use of high-priced food, liquor and gifts helps mightily in making a sale. Not so, says Clarence B. Randall, retired board chairman of Inland Steel, in a caustic attack on "The Myth of the Magic Expense Account" in the current Dun's Review. After 30 years in the executive suites of the nation's eighth largest steelmaker, Randall, 69, believes that "this orgiastic abuse of the expense account is a spectacular and alarming trend, participated in by enough companies and individuals to put all of us upon caution for the good reputation of businessmen as a class."

There is even good reason to doubt, says Randall, that lavish display and heavy-handed entertaining really pay off in sales. Purchasing agents for most U.S. firms are among the biggest targets of expense-account big spenders; yet Randall finds that most are notably serious and responsible executives who are not only likely to be unimpressed by the playboy approach but are often offended by it. The salesman forgets that "in the long run, the product must sell itself," and that it is bad tactics to yield to "the temptation of selling himself instead of his merchandise." Moreover, says Randall, expense-account lushes "are notoriously poor judges of people," who often take a man to a nightclub when he would rather be home with his family, to the race tracks when he would rather be puttering with his roses.

Because expense accounts are legal business deductions, it is the taxpayer who splits the check. "Lights would go dim along the Strip in Las Vegas," says Randall, "and chorus girls would be unemployed from New York to Los Angeles if it were not for that great modern invention, the tax deduction." Public indignation over expense-account abuses is rising, he says, and "may be the next spectacular issue for the politicians"--unless U.S. business sees the credit-card myth for what it really is and starts to put its own house in order.

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