"Business Adventures"

[fiefoe]

John Brooks' stories are from half a century ago, and it's interesting which ages well (business ethics for one) and which doesn't (Tennessee Valley Authority.)

__ Secondly, only an evanescent rally followed the 1929 deal—the next week’s losses made Black Thursday look no worse than gray—while a genuinely solid recovery followed the one in 1962. The moral may be that psychological gestures on the Exchange are most effective when they are neither intended nor really needed.

• Krafve was not the kind of man to envision his objective in a single revelatory flash; instead, he anatomized the styling of the E-Car into a series of laboriously minute decisions—how to shape the fenders, what pattern to use with the chrome, what kind of door handles to put on, and so on and on. If Michelangelo ever added the number of decisions that went into the execution of, say, his “David,” he kept it to himself, but Krafve, an orderly-minded man in an era of orderly-functioning computers, later calculated that in styling the E-Car he and his associates had to make up their minds on no fewer than four thousand occasions.
• it was at this stage of the game that Wallace, resolving to try and wring from genius what the common mind had failed to yield, entered into the celebrated car-naming correspondence with the poet Marianne Moore, which was later published in The New Yorker and still later, in book form, by the Morgan Library. “We should like this name … to convey, through association or other conjuration, some visceral feeling of elegance, fleetness, advanced features and design,” Wallace wrote to Miss Moore, achieving a certain feeling of elegance himself. If it is asked who among the gods of Dearborn had the inspired and inspiriting idea of enlisting Miss Moore’s services in this cause, the answer, according to Wallace, is that it was no god but the wife of one of his junior assistants—a young lady who had recently graduated from Mount Holyoke, where she had heard Miss Moore lecture. Had her husband’s superiors gone a step further and actually adopted one of Miss Moore’s many suggestions—Intelligent Bullet, for instance, or Utopian Turtletop, or Bullet Cloisonné, or Pastelogram, or Mongoose Civique, or Andante con Moto (“Description of a good motor?” Miss Moore queried in regard to this last)—there is no telling to what heights the E-Car might have risen, but the fact is that they didn’t.
• All the while, the voice of Neil L. Blume, Edsel’s engineering chief, could be heard on a loudspeaker, purring about “the capabilities, the safety, the ruggedness, the maneuverability and performance of these new cars,” and skirting the words “speed” and “horsepower” as delicately as a sandpiper skirts a wave.
• AND yet, in a way, the Edsel wasn’t so bad. It embodied much of the spirit of its time—or at least of the time when it was designed, early in 1955. It was clumsy, powerful, dowdy, gauche, well-meaning—a de Kooning woman.
• One of these was the scarcely believable circumstance that many of the very first Edsels—those obviously destined for the most glaring public limelight—were dramatically imperfect. By its preliminary program of promotion and advertising, the Ford Company had built up an overwhelming head of public interest in the Edsel, causing its arrival to be anticipated and the car itself to be gawked at with more eagerness than had ever greeted any automobile before it. After all that, it seemed, the car didn’t quite work.
• such a Mack Sennett routine of buildup and anticlimax.
• Wallace, in his capacity as Edsel’s pipe-smoking semi-Brain Truster, goes a step further by pinning the start of the disaster to a specific date—October 4th, the day the first Soviet sputnik went into orbit, shattering the myth of American technical pre-eminence and precipitating a public revulsion against Detroit’s fancier baubles.
• The subsequent euphoria of these former Edsel men did not stem entirely from the fact of their economic survival; they appear to have been enriched spiritually. They are inclined to speak of their Edsel experience—except for those still with Ford, who are inclined to speak of it as little as possible—with the verve and garrulity of old comrades-in-arms hashing over their most thrilling campaign. {Men failing upward indeed.}
• Whether the nostalgia of the Edsel boys for the Edsel runs to the humorous or to the tragic, it is a thought-provoking phenomenon. Maybe it means merely that they miss the limelight they first basked in and later squirmed in, or maybe it means that a time has come when—as in Elizabethan drama but seldom before in American business—failure can have a certain grandeur that success never knows.

• As reformers, however, we are largely powerless, the chief reasons being the staggering complexity of the whole subject, which causes many people’s minds to go blank at the very mention of it, and the specific, knowledgeable, and energetic advocacy by small groups of the particular provisions they benefit from. Like any tax law, ours had a kind of immunity to reform; the very riches that people accumulate through the use of tax-avoidance devices can be—and constantly are—applied to fighting the elimination of those devices. Such influences, combined with the fierce demands made on the Treasury by defense spending and other rising costs of government (even leaving aside hot wars like the one in Vietnam), have brought about two tendencies so marked that they have assumed the shape of a natural political law: In the United States it is comparatively easy to raise tax rates and to introduce tax-avoidance devices, and it is comparatively hard to lower tax rates and to eliminate tax-avoidance devices. Or so it seemed until 1964, when half of this natural law was spectacularly challenged by legislation, originally proposed by President Kennedy and pushed forward by President Johnson, that reduced the basic rates on individuals in two stages from a bottom of 20 per cent to a bottom of 14 per cent and from a top of 91 per cent to a top of 70 per cent, and reduced the top tax on corporations from 52 per cent to 48 per cent—all in all, by far the largest tax cut in our history. Meanwhile, however, the other half of the natural law remains immaculate.
• AN income tax can be truly effective only in an industrial country where there are many wage and salary earners, and the annals of income taxation up to the present century are comparatively short and simple. The universal taxes of ancient times, like the one that brought Mary and Joseph to Bethlehem just before the birth of Jesus, were invariably head taxes, with one fixed sum to be paid by everybody, rather than income taxes.
• “one of the most ironic twists of political events in American history,” the Constitutional amendment (the sixteenth) that eventually gave Congress the power to levy taxes without apportionment among the states was put forward by the implacable opponents of the income tax, the Republicans, who took the step as a political move, confidently believing that the amendment would never be ratified by the states. To their dismay, it was ratified in 1913,
• (In 1940s) What was revolutionary was the rise of industrial wages and the extension of substantial tax rates to the wage earner, making him, for the first time, an important contributor to government revenue. Abruptly, the income tax became a mass tax.
• Paradoxical as it may seem, the evolution of our income tax has been from a low-rate tax relying for revenue on the high income group to a high-rate tax relying on the middle and lower-middle income groups. The Civil War levy, which affected only one per cent of the population, was unmistakably a rich man’s tax, and the same was true of the 1913 levy. Even in 1918, at the height of the budget squeeze produced by the First World War, less than four and a half million Americans, of a total population of more than a hundred million, had to file income-tax returns at all.
• IT has been maintained that the Code discriminates against intellectual work, the principal evidence being that while depreciation may be claimed on all kinds of exhaustible physical property and depletion may be claimed on natural resources, no such deductions are allowed in the case of exhaustion of the mental or imaginative capacities of creative artists and inventors—even though the effects of brain fag are sometimes all too apparent in the later work and incomes of such persons. (It has also been argued that professional athletes are discriminated against, in that the Code does not allow for depreciation of their bodies.)
• The mechanics of this process are by now so well known that they need be merely outlined: a collector who donates a work of art to a museum may deduct on his income-tax return the fair value of the work at the time of the donation, and need pay no capital-gains tax on any increase in its value since the time he bought it. If the increase in value has been great and the collector’s tax bracket is very high, he may actually come out ahead on the deal.
• HYPOCRITICALLY egalitarian on the surface and systematically oligarchic underneath, unconscionably complicated, whimsically discriminatory, specious in its reasoning, pettifogging in its language, demoralizing to charity, an enemy of discourse, a promoter of shop talk, a squanderer of talent, a rock of support to the property owner but a weighty onus to the underpaid, an inconstant friend to the artist and scholar—if the national mirror-image is all these things, it has its good points as well.
• OPTIMISTS believe that some “point of crisis” will eventually cause specially favored groups to look beyond their selfish interests, and the rest of the country to overcome its passivity, to such an extent that the income tax will come to give back a more flattering picture of the country than it does now.

__ At about the same time, the printing trade contributed to the language the suggestive expression “foul copy,” and it was a favorite Victorian habit to call one object, or person, a pale copy of another.
__ Xerox salesmen, I learned from talks with some of them, are forever trying to think of new uses for the company’s copiers, but they have found again and again that the public is well ahead of them. One rather odd use of xerography insures that brides get the wedding presents they want. The prospective bride submits her list of preferred presents to a department store; the store sends the list to its bridal-registry counter, which is equipped with a Xerox copier; each friend of the bride, having been tactfully briefed in advance, comes to this counter and is issued a copy of the list, whereupon he does his shopping and then returns the copy with the purchased items checked off, so that the master list may be revised and thus ready for the next donor.
__ Perhaps the chief danger of this addiction is not so much the cluttering up of files and loss of important material through submersion as it is the insidious growth of a negative attitude toward originals—a feeling that nothing can be of importance unless it is copied, or is a copy itself.
__ “I don’t really know whether ‘morphological’ means anything. I think it means putting one thing together with another thing to get a new thing. Anyway, that’s what Chet was. Xerography had practically no foundation in previous scientific work. Chet put together a rather odd lot of phenomena, each of which was obscure in itself and none of which had previously been related in anyone’s thinking. The result was the biggest thing in imaging since the coming of photography itself. Furthermore, he did it entirely without the help of a favorable scientific climate.
__ Acting on a hunch unsupported by scientific theory, the Battelle researchers tried adding to the sulphur a small quantity of selenium, a non-metallic element previously used chiefly in electrical resistors and as a coloring material to redden glass. The selenium-and-sulphur surface worked a little better than the all-sulphur one, so the Battelle men tried adding a little more selenium. More improvement. They gradually kept increasing the percentage until they had a surface consisting entirely of selenium—no sulphur. That one worked best of all, and thus it was found, backhandedly, that selenium and selenium alone could make xerography practical.

__ Funston’s plan, simple enough in outline, was that the Stock Exchange or its members put up enough money to enable all the Haupt customers to get back their cash and securities—to be once again “whole,” in the banking expression. (The banking expression is etymologically sound; “whole” derives from the Anglo-Saxon “hal,” which meant uninjured or recovered from injury, and from which “hale” is also derived.)
__ THE agreement, in which some people saw an unmistakable implication that Wall Street’s Establishment now felt accountable for public harm caused by the misdeeds, or even the misfortunes, of any of its members, gave rise to a variety of reactions.

• After years of cloaking the company in the mantle of a wise and benevolent corporate institution, the public-relations people at G.E. headquarters were faced with the ugly choice of representing its role in the price-fixing affair as that of either a fool or a knave. They tended strongly toward “fool.”
• Illogical as it might seem, this last assumption becomes comprehensible in the light of the fact that, for a time, when some executives orally conveyed, or reconveyed, the order, they were apparently in the habit of accompanying it with an unmistakable wink. In May of 1948, for example, there was a meeting of G.E. sales managers during which the custom of winking was openly discussed. Robert Paxton, an upper-level G.E. executive who later became the company’s president, addressed the meeting and delivered the usual admonition about antitrust violations, whereupon William S. Ginn, then a sales executive in the transformer division, under Paxton’s authority, startled him by saying, “I didn’t see you wink.”
• If Erben, who had not been Ginn’s boss since late in 1954, had been the source of his air cover, Ginn must have been without its protection for over two years, but, presumably, in the excitement of the price war he had failed to notice its absence. However that may have been, here he now was, a man suddenly shorn not only of his air cover but of his philosophy. Swiftly filling the latter void with a whole new set of principles, he circulated copies of 20.5 among his department managers in the turbine-generator division... But now fate played a cruel trick on Ginn, and, all unknowing, he landed in the very position that Paxton and Cordiner had been in for years—that of a philosopher vainly endeavoring to sell the Lord to a flock that declined to buy his message and was, in fact, systematically engaging in the hanky-panky its leader had warned it against.
• Here, in a different field altogether, the communication problem again comes to the fore. Was Vinson really saying to Kefauver what he seemed to be saying—that naïveté about antitrust violations might be a help to a man in getting and holding a $200,000-a-year job at General Electric? It seems unlikely. And yet what else could he have meant? Whatever the answer, neither the federal antitrust men nor the Senate investigators were able to prove that Smith succeeded in his attempts to communicate to Vinson the fact that he was engaging in price-fixing.
• Philosophy seems to have reached a high point at G.E., and communication a low one. If executives could just learn to understand one another, most of the witnesses said or implied, the problem of antitrust violations would be solved. But perhaps the problem is cultural as well as technical, and has something to do with a loss of personal identity that comes from working in a huge organization. The cartoonist Jules Feiffer, contemplating the communication problem in a nonindustrial context, has said, “Actually, the breakdown is between the person and himself. If you’re not able to communicate successfully between yourself and yourself, how are you supposed to make it with the strangers outside?” Suppose, purely as a hypothesis, that the owner of a company who orders his subordinates to obey the antitrust laws has such poor communication with himself that he does not really know whether he wants the order to be complied with or not. If his order is disobeyed, the resulting price-fixing may benefit his company’s coffers; if it is obeyed, then he has done the right thing. In the first instance, he is not personally implicated in any wrongdoing, while in the second he is positively involved in right doing. What, after all, can he lose? It is perhaps reasonable to suppose that such an executive might communicate his uncertainty more forcefully than his order. Possibly yet another foundation grantee should have a look at the reverse of communication failure, where he might discover that messages the sender does not even realize he is sending sometimes turn out to have got across only too effectively.

• THE game of Corner—for in its heyday it was a game, a high-stakes gambling game, pure and simple, embodying a good many of the characteristics of poker—was one phase of the endless Wall Street contest between bulls, who want the price of a stock to go up, and bears, who want it to go down.
• What he risks is that the lender, for one reason or another, may demand that he deliver up his thousand borrowed shares at a moment when their market price is at a high. Then the grinding truth of the old Wall Street jingle is borne in upon him: “He who sells what isn’t his’n must buy it back or go to prison.” And in the days when corners were possible, the short seller’s sleep was further disturbed by the fact that he was operating behind blank walls; dealing only with agents, he never knew either the identity of the purchaser of his stock (a prospective cornerer?) or the identity of the owner of the stock he had borrowed (the same prospective cornerer, attacking from the rear?)
• in his teens was employed by the local grocer at the pittance that is orthodox for future tycoons taking on their first jobs—in his case, four dollars a week.
• In making what sounded like such a costly and unbusinesslike offer, Saunders, a rank novice at Corner, had devised one of the craftiest dodges ever used in the game. One of the great hazards in Corner was always that even though a player might defeat his opponents, he would discover that he had won a Pyrrhic victory. Once the short sellers had been squeezed dry, that is, the cornerer might find that the reams of stock he had accumulated in the process were a dead weight around his neck; by pushing it all back into the market in one shove, he would drive its price down close to zero. .. Saunders apparently anticipated this hazard almost as soon as a corner was in sight, and accordingly made plans to unload some of his stock before winning instead of afterward. His problem was to keep the stock he sold from going right back into the floating supply, thus breaking his corner; and his solution was to sell his fifty-five-dollar shares on the installment plan.
• That evening, Saunders released still another statement, and this one, while still defiant, was unmistakably a howl of anguish. “Wall Street got licked and then called for ‘mamma,’” it read. “Of all the institutions in America, the New York Stock Exchange is the worst menace of all in its power to ruin all who dare to oppose it. A law unto itself … an association of men who claim the right that no king or autocrat ever dared to take: to make a rule that applies one day on contracts and abrogate it the next day to let out a bunch of welchers.…

__ so-called professional stockholders—persons who make a full-time occupation of buying stock in companies or obtaining the proxies of other stockholders, then informing themselves more or less intimately about the corporations’ affairs and attending annual meetings to raise questions or propose resolutions—and that the most celebrated members of this breed were Mrs. Wilma Soss, of New York, who heads an organization of women stockholders and votes the proxies of its members as well as her own shares,
__ declared that A.T. & T. was eager for the Federal Communications Commission to get on with its investigation of telephone rates, since the company had “no skeletons in the closet,” and then painted a picture of a bright telephonic future in which “picture phones” will be commonplace and light beams will carry messages. (1966)
__ I understood the nature of the advantage that the company had gained by moving its meeting away from New York: it had not succeeded in shaking off the gadflies, but it had succeeded in putting them in a climate where they were subject to the rigors of that great American emotion, regional pride.

__ In the law of torts there is the maxim: Every dog has one free bite. A dog cannot be presumed to be vicious until he has proved that he is by biting someone. As with a dog, the former employer may have to wait for a former employee to commit some overt act before he can act.” To counter this doctrine—which, besides being picturesque, appeared to have a crushingly exact applicability to the case under dispute—Goodrich’s lawyers came up with a quotation of their own from the very same book.

__ The market price of the pound fluctuates in response to supply and demand, and so do the prices of all other currencies—all, that is, except the dollar, the sun in the planetary system of currencies, inasmuch as the United States has, since 1934, stood pledged to exchange gold in any quantity for dollars at the pleasure of any nation at the fixed price of thirty-five dollars per ounce.
__ Basel, a medieval Rhenish city that is dominated by the spires of its twelfth-century Gothic cathedral and has long been a thriving center of the chemical industry, was originally chosen as the site of the Bank for International Settlements because it was a nodal point for European railways.