Grecrt lndustricrlist Defines Reol Security

Cran'ford H. Greenewalt is president of E. I. du Pont de Nemours & Company. He made a speech the other day before the Commonwealth Club of San Francisco, in which he ansl'ered the question often asked of a business man of his prominence-"floqv good or bad will business be in 1954?" And his reply was, "Let's Take The Long Vietl'." And at the conclusion of his very interesting and impressive talk, he defined "security" in a manner that every thinking American business man should consider.

His company, E. I. du Pont de Nemours & Company recently celebrated its 150th birthday. The first available du Pont balance sheet is for the year 1810, and in that year its assets totaled $109,000. A hundred years later, in 1910, its assets harl grown to $81 million, and today they are about trvo billions of dollars. During that 1SO-year period rve had five major wars, at least six dep'ressions of great magnitude, and all conceivable political changes. Yet this concern grew steadilv, and is till growing. Showing what can be done.

Said NIr. Greenewalt: "When these events are viewed against the pattern of our country's steady, long-term grou'th and prosperity, the bad times, so troublesome in their particular setting, fade first into unpleasant memories, and finally to unimportant historical items in dusty and forgotten archives."

With regard to depressions and recessions, he uttered these l'ise thoughts:

"-\ feu' centuries ago, people had felv luxuries and their preoccupation was mainly with keeping themselves fed, clothed. and sheltered. In those days, I suppose depressions u'ere influenced more by the weather and its effect on agriculture than by any other single factor. Even in this area forecasters u,ere notoriously inaccurate, as I am afraid they are todav, since rveather still seems frequently unpredictable.

"In mo<lern tin'res. hou'ever. the causes or recessiou are much more nebulous, since they depend not upon natural phenomena but upon human decision. Whether or not we rvill have a recession in 1954 will depend largely upon the direction of the national psychology and on decisions that are influenced less by rational economic reasoning than by simple confidence and optimism. Obviously this involves great numbers of people, and the governing decisions rvill be made not only in business offices and board rooms but :rround the dining room table in millions of American homes. \\rhat we call "buying power" is in this country no arbitrarv factor. For most of the things people buy are cleferable. The purchase of that new automobile can be put off until next year. The current television set or washing machine or refrigerator can be tolerated a while longer. The nerr. honse doesn't have to be built. If people in the rnass as consunlers and as businessmen feel that they rvish to defer a large percentage of their normal purchases, rve 'ivill surely have a recession. If they are confident, rvilling, and able to satisfy their desires, we will have a boom. In short. if l'e could find some rvay of climbing into the minds of 160 million people, rve could tell very easilv horv good or bad business is going to be.

"No one has yet learned how to measure or how to influence people's confidence. A few things lve do know. We know, for example, that a depression, once started, accumulates momentum like a snowball rolling dorvn a hill, and that panic is a communicable disease Iar rvorse and far more rapid in its spread than any that affect us physically. It follows then that the business community must accept major responsibilitv for seeing that panic does not start. That it can do bv maintaining its confidence high and its economic temperature as near normal as possible' In this atmosphere, the corrections that will be applied will be small and not in themselves frightening.

Today, for example, business inventories are said to be high, perhaps substantially higher than can be justified by present or expected sales volume. If business people should suddenly decide to correct that situation all at once, panic and depression rvotlld almost surely ensue. If, on the other hand, the correction is made in small increments over a reasonable period of time, the problem shor.rld be manageable and confidence maintained.

"But above all else, industry must keep its eye firmly fixed upon the long-term upward trend-the amazing and dynamic industrial progress shown in this country over many years. For in the last analysis it is that upr'vard thrust in inventiveness and productivity that is the sure and tested tool that puts an end to any depression 'ivhether it is major or tninor."

All of Mr. Greenervalt's speech is rvise and heartening, but too long for reproduction here. But his final remarks on the subject of security, belong on everv business desk today. They are:

"It is essential as rve make our way through the squalls and alarms of 1954 that we keep our eye on the main goal, which is the continuation of our progress to greater productivity, to greater abundance, to ner'v products for the betterment and simplification of our lives.

"I do not think this requires us to forsake the search for r'vhat we call security. It does require us to knorv precisely rvhat we mean s'henlve define security as our goal.

"In the early da1-s of the last century, there was a kind of security in the u'ell-established settlements of our Eastern seacoast. The pioneers rvho journeyed u.estward across harsh and inhospitable country were not unmindful of the blessings and comforts they had left behind. But they perceived that, in the long view, a greater security was to be found in the enterprise that led them west. And today, in accepting the risks and hazards implicit in industrial progress, rve reach for the only real se,curitv-the abundance that enterprise rvill bring.

"We must not accept a definition of security that merely preserves the status c1uo, for that will lead to stagnation and

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