Dividends to Pay. By E. D. Kennedy. New York: Reynal and Hitchcock. $2.50. A. T. & T.: The Story of Industrial Conquest. By N. R. Danielian. New York: The Vanguard Press. $3.75. American Tel & Tel. By Horace Coon. New York: Longmans, Green and Company. $3.00. The Future Is Ours. By Jay Franklin. New York: Modern Age Books. 50 cents.
These four books all deal with the subject of large-scale business. Each of them is the result of burrowing in the mountains of statistical and economic data which have been accumulated in Washington in the last seven years. Each of them tries to get some of this information to the general public.
E. d. Kennedy, formerly of Time and Fortune, has written “Dividends to Pay” in order to warn us that the problem of prosperity and full employment cannot be dissociated from the problem of the giant corporation. His book is readable, vigorous, and pessimistic. The statistical analysis of corporate profits in the first part of the book has been heatedly criticized, but even if all the necessary qualifications were made, Mr. Kennedy’s essential thesis would not have to be altered. The concentration of property and production in the giant corporation, the large proportion of the total profits which flows to the big corporations, and the ability of some of these corporations to make money when the rest of the economy is foundering—these are matters which few would question.
The New Deal has developed no consistent policy on the problem of monopoly and the large corporation. There has been, and continues to be, a split between the advocates of enforced competition and those favoring regulation. Mr. Kennedy is justifiably pessimistic about both policies. Many people have a hunch that corporate concentration of wealth, control, and profits is responsible for the malfunctioning of our economic system, but there is no developed body of policy which purports to show just what should be controlled to remedy the situation.
One reason for the pessimism is the history of the regulation of public utilities. On this subject, the two books on the American Telephone and Telegraph Company have something to say. Both books are based upon the sixty volumes of data gathered by the Federal Communications Commission in its two year investigation—undoubtedly the best data on a corporation that have ever been made available for study. Because it presents some of these data, Horace Coon’s “American Tel & Tel” would be of value, if N. R. Dan-ielian, formerly of the Federal Communications Commission’s staff, had not done a much more skillful and comprehensive job in his “A.T. & T.”
Dr. Danielian’s book is far from a complete survey of the corporation. Business organization technology and many other aspects are omitted. But on the matters covered it gives the best information about a modern corporation with which the reviewer is acquainted. These matters are management control, the purpose of large-scale corporate research, the nature and purpose of widespread stock ownership, public relations policy, and profits. In addition there is a condensed history of the battle for control of A. T. and T., which should help anyone interested in understanding the history of our times, an informative chapter on public ownership of A. T. and T. during the war, showing how the owners of a well run corporation can increase their profits under public ownership, and much more that is really informative.
A.T. and T., the giant of giants, is probably the most amazing profit-maker of all the large corporations. How this can occur in an industry regulated by public authorities is a good part of Dr. Danielian’s book. After reading how the regulatory bodies have acquiesced in the computation of depreciation at a high figure when operating costs are calculated, and at a quite different and much lower figure when the value of property is being estimated for purposes of determining the profits to be allowed—a strange method of accounting which has been worth hundreds of millions of dollars to the shareholders of A.T. and T.—the less hardy individual will have his faith in regulation shaken.
In “The Future Is Ours,” Jay Franklin, the well known columnist, deals with a spectacular case of public ownership, the T.V.A. This little book is partly a description of T.V.A. and partly a liberal political and economic philosophy, with T.V.A. as the peg. The Tennessee Valley Authority is not treated as a publicly owned power business, but as a large-scale governmental operation to raise the standard of living of a depressed region. Mr. Franklin tells how soil conservation, flood control, public health, recreation, phosphate production, and many other operations have become parts of T.V.A.’s business.
It is easy to share Mr. Franklin’s enthusiasm for this vast business and for the ideals which animate it. But there is an old axiom that public ownership is easy to get and hold only in industries and places where profits cannot be made. The axiom is perhaps applicable to T.V.A. Mr. Franklin tells an interesting story of the conflict between T.V.A. and the power companies. He has faith in the future extension of this kind of regional planning. But it is just as important to notice that no more T.V.A.’s have been undertaken. And if the government is to carry out large-scale conservation and construction, it must either increase its taxes and borrowing greatly, or else take over from private business the production and sale of goods and services. Unpleasant as the first of these alternatives is to a government, the New Deal has certainly preferred it to the second.