PACK rou

Hondliy, November SO, 1959

Always A Risk In Business Field

THE DAILY REFLECTOR. GREEWVnXE. W. fc

Another Dangerous Crossing

It is a popular opinion that major industrial, venture. In spite of the.most careful and minute study 5 of this countr>% with their vast resources for re- that had gone into it, the venture failed.

search, market analysis and in general their facilities for pinpointing economic trends in the nation, almost never make a mistake when it comes to projecting

their programs. _ j. i

In spite of the popularity of this opinion, it fails to stand the test of actual experience. Without it, of course, there Would be many more failures than there are But even with it, the major busine.ss organization of the nation drop literally millions of dollars annually in lirojects that fail to pan out in spite of favorable predications by the best experts.

The latest and most vivid example of a rnajor failure of this kind is the demise of the Edsel, Ford Motor Companys new automobile that made its appearance amid a tremendous advertising, promotion

and publicity campaign. /

This month the company made a simple announcement. It was discontinuing production of the Edsel because the sales were not up to expectations . . . it was

An isolated case for big business?

No. To a greater or lesser degree* it goes on in

business year in and year out. It goes on in big business w'here experts of all kinds are available to evaluate specific problems of many kinds. It goes on in small businesses where one man pits his wits against the economic trends. The big businesses drop millions on some, make more millions on others. The little guy may wind up a success or out of business altogether.

The Edsel case points up the fact that in business, large or small, there is always the risk of losing money instead of making money, regardless of how thoroughly the situation is analyzed, regardless of how carefully the economy is evaluated. With millions upon millions at stake, even the experts can be wrong.

Disappointing, Though

Another spectacular failure by the United States to launch a moon rocket cannot help but accentuate

costing the company money instead of making money

The Edsel, in its short life span, cost the com-

pany millions upon millions of dollars. Indeed, the JL XlvAL loll L A llC J-JllU

company invested millions in research, engine^ing, market analysis and various other phases of the Edsel

nroirram even before the final decision was made to i - *

Suce the new car into production and market it. As in the eyes of many peoplp the previous successes of in the case of big business, the venture, would not have the Soviet Union in the field of space vehicles,

been launched had conditions not looked favorable to While the United States has made significant

the companys experts. It would have gone down as achievement's in the field of space vehicles, its suc-another idea that didnt hold practicaland proiit- most part have followed those of the

ableprospects even though millions had been put Union and to some degree at least have been

into it. overshadowed. The fact that the failures as well as

In the case of Edselthe green ight was given for successes of the United States in these efforts

production and sales, and more millions went into the been widely publicized here and abroad also

; Education Anc. Planning Process

may have a bearing on the situation.

In the long run, however, this latter factor will work to the advantage rather than the disadvantage of

the United States so far as its international position a t T>/-vxrT m

is concerned. Its willingness to deal honestly with the By-HAL# BUYLlli rest of the world by letting them know its failures as well as its successes in space developments should

Moniiay November 30, 19S9

Foreign

llshment of four different commissions or committees to studv different matters, all related directly to the public schools. The State Board of Education and the State Board of Higher Education both are

By LYNN NISBET EDUCATIONAL PLANNINQ Because it emphasizes points previously made here, and makes some new ones, your reporter has obtained permission _

[rortanVinforation conc^^

By no means should this latest failure to send up a moon rocket be construed to mean that this nation is dropping behind rather than continuing to forge ahead in its space effort. Each failure provides new

should -|t j -r1 j nPL.. TV /r

stimulate even greater confidence in the United States. iNlotes Jrouna in me iviaii

NEW YORK (AP)Things a columnist might never know if he didnt open his mail: Despite the march of science.

State Board of Education, to use a persoaal letter received several days ago as a guest column.

I have Just finished reading your excellent column of November eventeenfh. In it you question the possibility of projecting planning very far into the future. About educational planning, you say, It is more than ninety percent redesigning the system to meet present de-mand-or those which were evident several years ago. Unfortunately, you are right. In the Curriculum Study, I have the feeling that we are reaching out desperately to grab the coat tails of progress. Change in educational needs is so accelerated that we have not caught up with yesterday - much less tomorrow!

Studies have shown that it takes about fifty years for a successful new practice in the school program to become generally accepted. Concerted effort has sometimes reduced this to ten years. Instead of promoting dedrable change, the school has too often been a drag on progress.

The school is a social institution. While pure research in the university can push back the frontiers, the public school generally reflects change. Since change itself is slow, the lag between need and practice in the school is often great.

This does not mean that we should be satisfied with the status quo. In fact, the present concern about the public school curriculum is evidence that people, generally, are becoming more aware of the role that education can and should play in promoting a better life for all. Fear fbr national security adds urgency to our desire for reform.

For these reasons, curriculum study Is not necessarily futile. Taking stock of what we have, assessing what we need, and making plans for action to bring about improvement are all wroth while. This process, in fact, should be continuous. Study and research in education are as important as study and research in industry.

The last General Assembly showed that it did not have or would hot accept the information given it about certain aspects of public education. By resolutions it ordered the estab-

means it was a disappointment. Yet, this nation, its home owners. The number of scientists its people have overcome much greater^dis- American families ow^g their appointments in the past, and certainly they will in homes rose from 20 miUmn

the future.

Major Hearing iOn Tax Reform

By RALPH ROBEY

On November 16 the House Ways and Mean^ Committee, under the chairmanship of Rep.

Wbur D. MilLs (D-Ark.,), began the most elaborate hearings on tax reform in many decades. The hearings continue through December 18; and previous to their start some 180 papers had been prepared on various aspects of the present tax system. These papers were printed by the Committee in three volumes with a total of Just over 2400 pages.

The hearings themselves consist of a series of round-table discussions at which each participant summarizes his, paper and then is questioned by the Members of the Committee and his fellow panelists. None of the participants, incidental^, is a spokesman ifor any organization, and the largest group in terms of numbers is college professors.

My paper was on the relative role of Federal taxes and pointed out that 81 per cent of Treasury revenues come from income taxes. This was on the second day of the hearings, and on the sure you will agree, however, basis of the views expressed the

that we should at least catch day before it appeared wise to me

up. Perhaps we may even be to use my oral ^statement to

abie to identify trends. Where summarize some basic simple

these seem to be in the right principles involved in the prodirection, we may give impetus blem of tax rate reform. These

to change or to a return to a principles were the following: ----------- -

former better way. Study and Taxes For Revenue Purposes Only shortage of venture capital ana

periods of recession. It never gives us the hoped-for large surpluses in prosperity to pay off the debt created during economic downturns.

Goal of Balanced Budget

An effort to obtain stable revenues does not mean that the Federal Budget will be balanced every year, but that should be the goal. .

Growth of government is at the expense of growth of the private sector of the economy, and government expenditures should be held as low as possible.

Taxes never serve as a positive encouragement to business and the effort should be to make them as light a handicap as feasible.

Basic income-tax-rate reform should have priority over everything else in the tax field, and it is not necessary to have a study of indefinite duration before we start on the task of such rate reform.

The proper basis for tax rate reform is to use the increased revenues that result from economic growth for reductions from the lowest to the highest rates.

Closing so-called loophole is not as important as rate revision. 'These were put in the tax code after thorough consideration by the Congress, and must not be eliminated without great care. The nation today has a serious

to 29 million in the last decade. The rate of ownership in non-farm families is now 58 per cent, the highest in history.

Youve got mighty good eyesight if you can tell the number of steps in the pyramid on the back of a dollar bill. The answer: 13 Nature study note: A doc can run 48 miles an hour, a buck 49 miles an hour. This explains

schools and the training of pub- future just as each success affords similar information there is still an appalling

17 The?eR"to TILS as well as ihformation on conditions in outer space. uniS Ntona

Of need for educational study jf would be completely unrealistic, of course, to estimates that 44 per cent of the

e aeema to be tbat aay this latest failure was not a disappointment to the

we wait too long. We do not people of this nation as well as to our allies. By all are becoming a nation of

seem to be wling even to try ^ .--i----i-

to anticipate improvements needed. The study we carry out too often comes in spurts and starts resulting from lack of information when it is needed.

Rather, we need careful, continuous planning, based on study and research that give convincing evidence of need, even to the legislature.

Industry would not dream of accepting such a spasmodic hindsight approach to research as we have been using. Why are we satisfied with it in the education of our children? In this day of the Research Triangle, why is so little planning being done to include adequately financed research in education? Public education has been described as the chief responsibility of the State, and quality in public education as the chief concern of the people in the State. Is education so simple that It does not require study? Is the schooling in which we want quality instruction so fixed that all it requires is application. and never change? Do w e think that study and research are not important in education?

Some say a return to the fundamentals is all that is needed. The trouble here is that the fundamentals themselves have changed. Mathematics is a good example. We shall have to retrain our teachers and re-WTite our textbooks before we can teach mathematics in the way scientists and mathematicians say it must be taught now.

You are certainly right that we cannot plan too definitely for an uncertain future. I am

why the deer population is increasing rapidly.

Boredom Is one of civilized mans greatest enemies. A study of 300 men and women who complained of chronic tiredness disclosed only 20 per cent had any organic aUment. In most of the others fatigue was the result of simple boredom.

You can win money be betting your friends they dont know the name of George Washingtons favorite horse. It was Blue Skin.

Heres a health tip for barflies. A teacher of orthopedic surgery at Northwestern University reports that hooking your foot on the rail when you stand at a bar straightens your spine and reduces strain, thus making you more comfortable.

Do you feel you are losing backbone as you grow older?

Other Editors Saying Griiton's New Spirit

research in education are necessary if we are to be intelligent about it. There is no other way to avoid being permanently kept in the position of reaching out desperately to grab the coattails of an illusive progress.

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The tax system should be used only for revenue purposes, and should be designed with a view to obtaining as nearly stable revenues as possible.

Compensatory spending may have some appeal in theory, but it will not work in practice. Rather, all it does, or can do, is give us larger deficits during

this can be corrected only by tax rate reform.

All of those dogmatic statements appear true to me. However it must be recognized that many persons disagree. This is the case in every one of thee principles, and that is one of the rea.sons why this set of hearings is so important.

(Goldsboro New-Argus)

Grifton is a lovely village in Pitt County. It is a fine place in which to savor a leisurely life, to raise ones children in the fear and admonition of the Lord and with all due regard for all men.

Griftons population is estimated at about 1,800. When the last census was taken it was 510. Location of the duPont dacron plant three miles from the town accounts for the unusual growth. Many duPont workers picked Grifton for their home. Others wanted to settle there but could not get houses at that time. There was not at the time of the du Pont start an adequate source of financing for new homes. That is corrected now since building and loans from nearby towns have entered the picture to help. We hear a Farmville B and L finances more than a score of comfortable homes.

But Griftons growth has been in spirit as much as in size.

The people of the town have subscribed over ^ $100,000 toward a fund to build a building for a garment factory.

That is a lot of money for Grifton.

Such a response would be like the raising of a million dollars

or so in Greenville, Kinston or Goldsboro.

With the town showing it was solidly behind the factory to make boys and mens woolen clothing, it was easy to borrow the remainder pf the money which had to be raised to build the new plant. It will hire 300 people.

But Grifton looked before it leaped. It played it safe. It had careful studies of the operators who desired to lease the plant. These investigations were made by banks, by industrial departments of utility firms and others. And there was a practical guarantee that the output of the plant would have one nationally known firm (J.C, Penney) which contracted to buy almost half of the production.

The Grifton spirit did it.

The new garment factory is another in a trend which is seeing the small and medium-sized towns of Eastern North Carolina become important centers of clothing manufacturing. There is a real story here which has not been told. Garment making plants employing several thousand workers now are operating successful and satisfactorily In near a score of eastern communities. We must go to Wade Lucas for details.

Well, in a way you are. You are born with 33 vertebrae, but fusion reduces them later in life to 26.

A pleasant custom: In Scandinavia, members of a family line up their shoes in a row before going to bed on Christmas Eve. This signifies their equal love for one another and their desire to live in peace together in the coming year.

Smoke gets in my eyes: In the United States now some 55,-000 cigars are smoked every three minutes around the clock.

Tommy Manville, last of the oldtime playboys, uses his automobile license plate as a matrimonial box score. He has had 10 wives, and his car plate is TM-10.

Executive signs: This one is on the desk of Irving J. Bott-ner, president of the Esquire Shoe Polish Co.; Worry kills more people than work. So stop worrying and start working.

The U. S. Marines always have been a real front-line outfit. During the Korea fighting fully 75 per cent of the corps officers and men saw combat.

It was Cervantes who observed: Thats the nature of womennot to love when we love them, and to love when we love them not.

Opinions

In

'Brief

"When we agree to question nothing the Reds have done up to yesterday, they Just might favor us with a truce in the cold war. This is the gangster saying that if youll forget about his 15 murders, he may promise not to commit any more. "Where is the honor in these terms? Fort Myers (Fla.) News-Press,

"Not to belabor an issue, but upon re-reading Socrates, we find this; Philosophy Is not a search for the right answers, but a search for the right questions. Pity this was not the philosophy guiding the producers of the now extinct questlon-and-answer television shows. The Publisher Auxiliary

Outlook

By ROGER BABSON

BABSON PARK, Mass.r-Sinca returning home fixixn my long trh? to Europe, I find that many of my friend here are greatly Interested in buying stocks now of German, French, Italian, and other European companies-IS ALL EUROPE TimNING SOCIALISTIC?

Let me first say that in Norway, Sweden, and Denmark, tha railway, telephone and telegraph, and all the ntUiUes ara owned by their national govern-menU. iUl these countries have many private store and huge 00 - weratlves. In some of these oountries every' co-operar tive not owned by the stata must have a majority of its directors cltizwis of that country. Holland and Belgium are mora friendly to outside investors.

In Poland and Russia every^ thing is state-owned. Hence, the purchase of European stocks by Ameiicans is limited practical--ly to stocfeL of corporations In a limited numbCT of imtioB aa noted above.

CONDITIONS IN GERMANY West Germany is now v^ prosperous and this prosperity extends in decreasing proportionuntil we reach Spain. The German people are Intelligent and Industrious, and are not handicapped by unreasonable labor leaders or tax collectors. The favorite German stocks are the industrials, namely chem-icsds, metallurgy, electronics, building materials, automobiles, paper products, and chain ' stores. The bankswhich largely carry on the Investment businessare also making money. Many of these companies may offer temporary profits.

American investors who buy them are, however, playing with fire. I hope I am wrong; but I think that Mr. K will succeed in getting control of all Berlin and will ultimately consolidate East Germanywhich Russia now controls and which I visitedwith West Germany. This could enable Mr. K to control the entire area under the Polish System. The Pole Insist they are not Communists: but all property Is owned by the Polish Federal Government, which is friendly to Russia. Hence I do not recommend the purchase of any German stocks or bonds.

As I stated last week, Mr. K does not want World War III. His hope is that some way can be worked out for him to gradually consolidate and control Germany without fighting. But if he must fight to bring about his goal, and if we should feel obliged to get into a nuclear war, I hate to think of what would foUow. Western Europe does not want Communism; but I believe that with the exception of the property owners who are a small minoritythe majority are favorable to state onwnership under the Polish System.

If World War HI should oome, all -Europe would immediately turn socialistic and have state ownership; but graduallywar or nor warthis is the trend. This especially applies to France, Italy, and perhaps to England, notwithstanding the recent fine victory of the conservative party. They dont want Communism; and I hope the Russians will get tired of it. Much, however, depends upon China which is fast developing its own form of Communism. All the above means that my U. S. readers had better look upon European stocks as dangerous speculations rather than as investments.

OUR SECURITIES AND EXCHANGE COMMISSION Bankers and brokers have never liked our Securitle and Exchange Commission. 'They claim its red tape puts a ball and chain on the sale of new issues of stocks and bonds. I, however, feel it is a protection to all honest investors, and even speculators, if they take the time to read the prospectuses which the Commission requires.

Stock and bond Issued by banker and corporations In Germany and other European countries do not hava to be reported to auch a comml.iionj (Continued on Page 6)

Strength For Today

Deferred Compensation Leaflet

By E ARL L. DOUGLASS

IT CALLS FOR THE CURSE OF MAN

Have you ever asked yourself why sensible beings as most humans are get involved in war?

Think about war for a minute. Who wins a war? In the old days the king won. Later, flamboyant leaders won. We have come to the day when nobody wins. And never in the history of all mankind have the common people gained by war. They have sloshed through the mud and taken spear and bayonet into their bodiesand somebody else got the glory and the gain. The Napolonic Wars! The Franco-Prussian War! The Spanish American War! The The First and Second World Wars! What about the people who fought these wars? The wo-^ men who sat at home and wept?* The children who grew up orphans? The children that were never born because'* a man who might have begotten them died in his youth in battle?

Are we insane? No place on earth do the common people want war. War is a game played by leaders and their governments, There is no sense to war. It is a cruel use of others by a selfish few determined to

advance what appears to be their own interests at any cost.

Le us not be calm about the peace movement. We need to get on fire about this thing. War is an outrage. It Is a cruel procedure by which the strong and prominent climb over the weak and inconsequential to selfish glory.

War has upon it the curse of God. It needs also to have upon it the curse of man.

GIVE

By ELMER ROESSNER

A leaflet by the Small Busi-iness Administration is doubly significant in that;

1, It outlines the practice of deferred compensation, which is sure to be a tremendous factor in all .employment in the future, and;

2. It places one government agency (the SB A) in the role of telling the public how to escape some of the clutches of another (the Internal Revenue Service).

Lets talk about No. 1 today, No, 2 tomorrow.

Deferred compensation, the leaflet says, is a method of increasing a key employee's pay in the future rather than in the present. The aim is to provide

is, from 65 to 75. If he should die before age 65, the $5,000 per year will be paid to his wife or children for the 10-year period.

It wont cost the employer any more to pay Aldershot

difficulty in hiring.such a man.

Maybe you can bid for his services by offering the inducement of a larger salary. But salary Increases dont always, mean much in these days of steeply progressive Income tax

$5,000 a year for 10 years after Mates. Thats your government

his retirement than it would to give him a raise now; in fact, the employer might garner a little interest on the money if he puts it in a fund.

Furthermore, Aldy (as the boys in the shipping room probably call him) is content because a firm, 10 - year income looks a lot more solid than a pension.

HELPS RECRUITING

Deferred payment plans can help small businesses pirate

a way through which, after re-' gootl men from other compan-

THE UNITED WAY

tlrement, he will continue to receive pay from his employer for past services rendered. EXAMPLE CITED The leaflet cites the example of the case of a fictitious Mr. Aldershot, aged 55. He receiv-ies a salary of $15,000 per year and his employer provides for him a deferred compensation arrangement. In this case it means that he is to receive $5.000 per year for 10 years after he retires at age 65; that

ies, the SBA leaflet hints.

Suppose your firm wants to get a key executive to fill an important post, it says. This man may be participating, already In a generous pension plan. He may be covered by a substantial amount of group life insurance, group hospitalization, and major medical, accident and health services. He may be involved in stock ownership plans.

A small company may have

speaking, bub. It continues: However, if you supplement the annual-salary offer with a generous deferred - pay agreement, the after-retirement security growing out of it may well be all the inducement you need. This can be particularly true if you provide substantial aeath benefits for the family by making the deferred payments to the wife and children in case the man dies prematurely. HOW IT WORK.S Deferred payment plans can be tailored to the conditions involved, the SBA leaflet points out. Under proper agreements, the company need not be bound to keep the man employed until retirement, and he can resign at any time.

Companies can lay aside funds to provide the after-letlrement pay. in which case they will draw Interest on the money, or they may underwrite it by by bujdng paid-up-aL65 insui'ance.

Aasumlng ti key man retired at 65. The firm would then have paid to the lift inaurance company, In iwemiums, in tha neighborhood of $30.(W0 to MO.-OOO on a $50,000 policy. Premiums stop at 65 and tha insurance company will pay $50,000 when the man dies.

Now suppose the key man lives 10 years after retiring, and that his firm paya him $5,-000 yearly. The firm deducts those payments from company Income Just as If they were salary. With a 50 per cent income tax bracket, the cost to the firm ... is only $25,000, the leaflet continues.

Then if the Insured man dies, the firm receives $50,000 insurance tax-free.

Observation: Every executive ought to have a copy of this leaflet and when the "time comes, he should ask for deferred compensatimi instead of a raise. Write to the Small Business Administration, Washington 25. D. C., and ask for a free copy of Management Aids for Small Manufacturers, No. 107.

Observation; Every employer ought to have a copy, too, to know what to expect, how to keep key executives content, and how to pirata execuUvea.