SPAN: June 1965

INDIAN VISITORS ON FIFTH AVENUE, NEW YORK

SPAN

OF EVENTS I

N AUGUST 1935, President Franklin D. Roosevelt signed the revolutionary Social Security bill into law. It provided the American citizen with some assurances that even when circumstances beyond his control reduce his earnings, he may have enough income to meet his and his family's needs. As he signed the bill, President Roosevelt called it "the corner-

stone in a structure which ... is by no means complete." This year, thirty years later, President Lyndon B. Johnson is urging Congress to extend the work begun in the 1930's. Important measures have already been enacted; others are in the legislative process, apparently near certain passage. Vice President Hubert H. Humphrey recently commended the accomplishments of the 89th Congress during its first one hundred days and predicted that it will be the most productive in thirty-two years. And he credited the "vigorous leadership" of President Johnson plus an unprecedented peacetime unity among Americans which amounts to a national consensus. The President,

who maintains almost constant contact with Congressional leaders of both parties (below), has urged passage of legislation which will: provide medical care to senior citizens; help lower income groups and students in less affluent areas of the country; increase Social Security payments to the aged; and assist States with increased appropriations for primary and secondary schools. In addition, the Johnson Administration is urging Congress to help forge a strong economy, encourage exploration of outer space, and to continue programmes to defend and preserve the peace. For both the President and Congress, the summer of 1965 appears to be busy-and productive. •

CONTENTS

FOR VOLUME

SCIENCE OF TOD~

by Vimla Patil

to

VI

TECHNOLOGY

OF TOMORROW

WHEN THE UNITED NATIONS WAS BORN HIGH STEPPING TREE TRIMMERS

2

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16

AMERICA'S VERSATILE DESIGNER

by Jalabala Ramachandran IF MARX WERE TO RETU-B.N ~ A 4

by Adolf A. Berle USIS /t..dfT*<-.r STEEL CURVES IN THE AIR

by Richard Montague

p.t. !,ejl. 11bft

KEEPING TRACK OF THE ASTRONAUTS

by V. S. Nanda PORTRAIT FROM HISTORY: ROBERT E. LEE

by Richard M. Ketchum e:-- 1/1;1. f' ••.• /t;c I

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SUMMERTIME

IS MUSIC TIME

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Two Indian women pause at Fifth Avenue and 56th Street, New York. India's new craft and fabric shop, opening this month, is located in Corning Glass Building, seen in the background, in the heart of Manhattan's shopping area. Photo by Eliot Elisofon. © 1964, Time, Inc. FRONT COVER:

Twenty years ago-June 26, the United Nations Charter at San Francisco. who meet in the United Nations Building, New gation at a recent General Assembly fS'shown BACK COVER:

;:

I945-fifty nations signed There are /lOW 114 members York City. The Indian deleat right centre. See page 9.

EDITORIALSTAFF:Avinash Pasricha, Nirmai Kumar Sharma, K. G. Gabrani. ART STAFF:B. Roy Choudhury, Nand K. Katyai. Photographic Services: USIS Photo Lab. Production Manager: Awtar S. Marwaha. Published by United States Information Service, Bahawalpur House, Sikandra Road, New Deihi-i, on behalf of The American Embassy, New Delhi. Printed by Arun K. Mehta at Vakil & Sons Private Ltd., Narandas Building, Sprott Road, 18 Ballard Estate, Bombay-I. Pages 21 to 28 printed by offset at G. Claridge & Co., Caxton Works, Frere Road, Bombay-I. Subscription rates for SPAN: One year, Rs. 4; two years, Rs. 7. Address subscriptions, including remittance, to nearest regional distributor. NEW DELm, Patrika Syndicate (Pvt.) Ltd., Gole Market; BOMBAY,Lalvani Brothers, Dr. Dadabhai Naoroji Road; MADRAS, The Swadesamitran Ltd., Victory House, Mount Road; CALCUITA, Patrika Syndicate (Pvt.) Ltd., 12/1 Lindsay Street. Subscriptions are not accepted from outside India .• Manuscripts and photographs sent for publication must be accompanied by stamped, self-addressed envelope for return. SPAN is not responsible for any loss in transit. SPAN encourages use of its articles in other publications except where copyrighted. For details, write to the Editor, SPAN.• In case of change of address, cut out old address from a recent SPAN envelope and forward along with new address to A. K. Mitra, Circulation Manager.

Please allow six weeks for change of address to become effective.

Behind the success of this intyrnational project were years of planning and co-operation.

As the gigantic polyethylene balloon is being inflated with gas, a technician carefully examines the seams for possible leaks.

by Project Manager Robert Kubara of the NCAR. Mr. Kubara, who belongs to the ISO-strong, select community of balloonists in the U.S., was responsible for all the operational planning and conduct of the expedition. "Balloons are relatively cheap vehicles that can get equipment to altitudes of 100,000 feet or more, depending on the researcher's field of interest," he explains, "and there is also the added advantage of recovering the instrumentation which has not been accomplished yet in the case of satellites." Mr. Kubara adds that although seemingly easy, the balloonist's job is a complex one. "Studying the dynamics of a balloon flight is complicated," he says, "the balloonist must be part electronic engineer, part physicist and part meteorologist to handle his job efficiently."

Neither is it easy to ensure that the programme runs along smoothly, says Bertram Stiller, of the Naval Research Laboratory, who is also scientific co-ordinator for the expedition. "The apparatus we fly has been evolved over a ten-year period and is invaluable," he says. "Its immediate cost in no way reflects the amount of design and effort that has gone into it." Every member of the crew, therefore, must make a concerted effort to achieve maximum success.

For Robert Kubara, Bertram Stiller and their colleagues, the launch operations do not start at dawn when the balloon is actually flown. They start days ahead at the workshop where, piece by piece, they assemble the payload to be sent aloft. As much as forty-eight hours before the event, they meet with the launch crew, the meteorologists and other scientists to plan even .the most insignificant details. Small pilot balloons which check wind conditions are sent up hourly and the anxious vigil for the 'go' signal goes on well into the night.

The long-awaited launching takes place at dawn. The launch crew determines the layout of the 280 feet, 300 to 500 million cubic centimetres, balloon. Slowly, helium or hydrogen from cylinders inflates it and at a radio command, it flies up high into the sky with its cargo of instruments which can weigh from 300 to 2,000 Ibs. The method by which a balloon will be launched is predetermined. The main two are known in technical terms as the "Anchor Line" method and the "Dynamic" method. All but one of the flights conducted at Hyderabad were launched by the "Anchor Line" method. "In this method," explains Robert Kubara, "the balloon is held in a launch arm and its entire train is secured to an anchor vehicle by a rope, a small part of which holds the scientific payload. As the countdown proceeds, a part of the balloon is inflated. At the command, it is released from the spool and it rises, picking up the parachute and the payload, until the system is fully extended. Finally, a small explosive device separates the baBoon from the anchor rope and it flies off swiftly to the desired altitude."

On the other ,hand, the more difficult "Dynamic" method involves the use of a large truck to hold the payload. As the balloon is released, the truck moves with it until it stands vertical over the payload and is able to lift it.

The launching over, weary and red-eyed, the scientists can enjoy but a few hours of rest before they embark on the next operation. Through the tense hours until the payload is retrieved, they keep in touch with the tracker plane by radio; frantic phone calls keep them informed of the movement of the recovery crew in a van which sometimes may have to drive more than 300 miles before they reach the target.

Back at the tracking station, some half a mile away from the launch site, scientists begin interpreting signals coming in on a vast array of electronic equipment. Antennas track the balloon as it becomes only a white speck in the sky.

Only when a telegram comes, bringing news that the package has been found and when the recovery crew has brought it back to the workshop, is the end of a single flight in view.

The devices in the payload are dismantled and the data stored for analysis.

Each of the payloads consists broadly of two parts-the detector system and the recording equipment. Some of the complicated instruments sent aloft include gamma ray telescopes, neutron counting devices, nuclear emulsions, cameras and other telemetering devices. Of these, the one most widely used in the sixteen flights was the nuclear emulsion device. "The emulsions," explains Dr. Roy Daniel of the Tata Institute, "are special photographic plates, highly sensitive to cosmic ray ¡particles.

The image they obtain is three-dimensional as opposed to the two-dimensional one ordinary plates produce." "It is possible," he continues, "through this system to detect under a microscope the impact a charged particle makes, or the interaction it produces when it comes into contact with other matter."

The sixteen experiments were roughly divided into three categories-the study of the primary nature of the cosmic ray particles; the study of their reaction to other matter; and the study of high energy gamma radiation. In several cases, naturally, these studies overlap. "But," says Mr. Stiller, "this is a very desirable situation because it is the only way one can ascertain any unknown sources of error inasmuch as differences in Continued on page 7

Indian engineers track the soaring balloon by a theodolite mounted on the roof of the tracking station at Osmania University.

Released Jrom the spool, the balloon rises swiftly to an altitude of more than 100,000 feet with its load of sensitive instruments.

results are closely examined." It is for this reason, he says, that "we consider that our work is complementary. It will be possible later to compare all our findings after perhaps two years' study."

What, the layman wonders, goes behind a scientific endeavour of such vast magnitude? Years of planning and co-operation, say the researchers. This year's equatorial expedition took shape initially when the scientists of the three countries met at the congress of the International Union of Pure and Applied Physics in Jaipur in 1963. Once interest in such a programme was found to be common, individuals, organizations and government agencies went to work, pooling together personnel and resources.

"The Tata Institute had a successful history of previous flights and could make logistic support available," says Dr. Roy Daniel, "and together, we could carry out experiments on a scale that individual groups by themselves could not do on their own." The U.S. National Science Foundation and National Academy of Sciences provided the funds for this entire programme and contracted other organizations to co-ordinate and supervise the flights, as well as to make and launch the balloons.

The U.S. experimenters were: the University of Minnesota, the Naval Research Laboratory, the New York University, the University of California at Los Angeles, the University of Rochester, the Air Force Cambridge Laboratory and the Southwest Centre for Advanced Studies.

Once the framework of the programme was set up, two major problems faced its architects. The flights had to be made in a part of the equatorial region where the vagaries of the weather were least likely to interfere with the experiments.

And climatologically, Hyderabad in central India seemed to be the most suitable site, where the large land mass would make tracking easy. Also, the researchers of the Tata Institute could bring their own experience to the programme. "The existence in India of a group carrying on fundamental research in the field is extremely valuable to the cosmic ray community throughout the world," says Mr. Stiller. "They are uniquely situated in the vicinity of the equator and can carry out continuing research during the entire solar cycle at a location not readily accessible to Western scientists."

Secondly, it was necessary to test a variety of materials before an appropriate kind of balloon could be selected to suit Continued on next page

Left, as the balloon reaches higher altitudes and becomes a mere white speck in the sky, the antenna follows its track. Below, some 400 kilometres from the launching site in Hyderabad, thrilled villagers watch the curious-looking object as it descends.

The experiment over, a village woman receives a part of the used polyethylene balloon which will help make her hut rain-proof

conditions in India. Little was known about these except that extremely low temperatures could occur at high altitudes, making the ordinary polyethylene brittle, and therefore, useless. Once again, months of research and test flights were needed before suitable balloons were found.

When collaboration and hard work on such a vast scale precede research, the layman wants to know what benefits he will reap from its findings. All the participants agree that this endeavour will not bring immediate results. "It is chiefly fundamental research for its own sake," they say.

However, what Prof. Peter Fowler of Bristol University has to say on this question justifies all fundamental research: "Most fundamental research is done at a time and in conditions when its application in day-to-day life is not obvious. But if one looks over all scientific endeavour, one finds that new knowledge nearly always has important uses in the long run.

Take for instance the discovery of X-rays, which today are a most useful weapon in the fight against disease. Their discovery was certainly hastened by past research not directed at the solution of immediate problems, but purely at acquiring more knowledge. In the past, fundamental research has proved eminently fruitful in giving the human race new technology and advances."

In the not-too-distant future, therefore, the data obtained in India during this co-operative scientific expedition may supply some vitally needed knowledge for space flights, improved medicine or even better weather forecasting methods. â&#x20AC;˘

Before the U.N. Charter could be accepted as a workable document, its many minute details had to be considered, debated and finally agreed upon by representatives of fifty nations.

Delegates of Peru, left, and France, above right, address committees during conference. Charter was divided into four parts for drafting purposes: General Provisions, General Assembly, Security Council and Judicial Organization. Each session was handled by specially appointed committee in order to expedite the proceedings. Plenary sessions were held in Opera House. right.

A truly great example of international creative endeavour, the United Nations Charter is a declaration of faith that "war is not inevitable, faith that peace can be maintained."

President Truman, opposite page, speaking at closing session of San Francisco Conference. urged all nations to translate the lofty words of U.N. Charter into worthy deeds for all mankind. Nearly 20 years later Guatemalans. above. haul UNICEF dried skim milk to mountain village; an Indian, below left, helps eradicate malaria under WHO programme, and Congolese students study under FAO expert.

HIGH STEPPING TREE TRIMMERS

T

HE TWO GIANTS stalking the grove are no circus performers, but peach growers who have found a quick and easy way to prune their orchard.

California farmer Wayne Deming and his son Douglas designed these three-legged stilts, made of three lightweight aluminium poles with a flat disc on the bottom that prevents them from sinking into soft turf.

The stilts eliminate much climbing and time-consuming ladder moving, allowing the Demings to complete their tree-trimming chores in half the usual time.

It took the dexterous Demings only a few days to master the two-metre stilts.

They now stroll jauntily from tree to tree with no fear of falling and have even learned to balance so neatly that they can sit down in mid-air (above). But, high and mighty as they are, they still have to climb an old-fashioned stepladder to get into the new gadgets. â&#x20AC;˘

Exterior of International Business Machines pavilion at World's Fair was designed by late Eero Saarinen with Eames doing interior exhibit. Many devices including canopied displays at pavilion and, top, mechanical puppet show are used to express theme.

AMERICA'S VERSATILE DESIGNER and graphic displays-a

range that has made him a leader of contemporary design.

IBM PAVILION'S 'Big Top' canopies at the World's Fair, coloured mobiles whirling in the sun, a petal.thin plastic chair on spidery steel legs, the sombre spaces of the Nehru Exhibit in New York, have all been fashioned by the brain of one man, Charles Eames, fifty-seven, noted American designer. In little more than three decades, Eames has grown from a steelworker in St. Louis, Missouri, to one of America's top designers. Displaying amazing versatility in his range of work, he has moved effortlessly in such disparate fields as industrial design, graphics, exhibits, furniture, films and toy making. It is probably this facility for working with widely different materials that marks Charles Eames as a "young designer." While others, like Saul Bass in graphic design, or Raymond Loewey in industrial design, have achieved distinction in one field, Eames has done so in many. He is a man whom students approach reverently

T

HE

Charles Eames has introduced new techniques in cinematography such as simultaneous six screen projection of science film.

from all comers of the design world and discover that his enthusiasm exceeds their own.

Charles Eames insists on sharing the credit for all his work with his wife, Ray Eames, the painter. No one who has been to the Eames home in Venice, South California, could deny that Eames's phenomenal creativity receives much inspiration from his home. Perched by the sea, on a hillside planted with eucalyptus trees, Eames has designed and built a house-cum-studio that is stimulating just to look at. The Eames home, which has grown from shared beliefs, felt deeply, and shared labour, loved deeply, makes the exuberance of the Eames designs, and the precise craftsmanship of each project, readily understandable.

If a man can build a house like this for himself, he will build everything he makes the same unique way.

Eames came to prominence as a designer with his, now famous, Eames Chair: extremely light seat and back, and slender steel legs with rubber mounts providing resilient joints; the Continued on page 19

The essay by A.A. Berle on the following eight pages is based on Professor Berle's book, The Ameri-

can Economic Republic, the impressive product of many years of careful and concentrated study of the American economic system. He finds that classical economists deal with the American system as though it were a form of old-fashioned "capitalism." This, he says, is not the fact. He notes that Marxists still write of the American economic republic as though it had followed the predictions of Karl Marx. This conclusion is "mere wild fiction," he says, because "both classic capitalism and Marxism are obsolete. They really belong in a museum of nineteenth century thought." In practice, Professor Berle submits, the American results have disproved practically all the predictions of Marx.

ABOUT THE AUTHOR

_

Attorney, economist, educator, businessman, statesman and author-all these titles describe Adolf A. Berle.

A graduate of Harvard Law School, he practised law in Boston and lectured (1925-28) on finance at the Harvard School of Business. He now practises law in New York, where since 1927 he has been on the law faculty of Columbia University. He has also been a lecturer on economics and holds honorary degrees from several universities. He is chairman of the board of the Twentieth Century Fund and of the University of the Andes Foundation and served as chairman, Ecole de 1'Europe Libre (Strasbourg) from 1948 to 1959. Professor Berle was a staff expert for the U.S. delegation to the Versailles Peace Conference (1918-19). As an original member of President Franklin D. Roosevelt's "brain trust" he helped draft laws and set up Federal economic agencies which are still in being. He has been Assistant Secretary of State, Ambassador to Brazil and, most recently, special assistant to the Secretary of State and chairman of the late President John F. Kennedy's task force on Latin American policy. He is the author of fourteen books on economics, law and diplomacy. His latest work is The American Economic Republic (Harcourt, Brace and World, Inc., New York). This article, a condensation of part of The American Economic Republic, presents some of the results of thirty-five years of thought on American economics.

LASSICAL ECONOMISTS deal with the American economic system as though it were a form of old-fashioned "capitalism"-whichis not the fact. Marxists write of the American economic republic as though it had followed the predictions of Karl Marx-which is mere wild fiction. In practice, the American results have disproved practically all the predictions of Marx.

Were Marx to return now, he would, I think, be the first to realize that the American economic republic bears little relation to the "capitalism" he described and attacked a century ago. The American economic republic has developed new forces, has achieved undreamed of results, and has left nineteenth century capitalism far behind.

As a result, both classic capitalism and Marxism are obsolete. They really belong in a museum of nineteenth century thought.

Marx's first assumption was that capital and wealth (to him, they were the same) would steadily accumulate in the hands of a tiny group of property owners. These would be a shrinking island in the sea of proletarian workers and farmerswage slaves-living at bare levels of subsistence.

Actually, under the American system, capital and economic power was concentrated under the corporate system; but wealth and ownership did not follow that concentration. Wealth was increasingly represented by shares of corporations . and by participation in pension funds, insurance companies and similar institutions, and is increasingly widely distributed. As wealth has increased in the United States, both it and income have been increasingly diffused throughout the whole population. Actually, distribution of income has gone on more rapidly than distribution of wealth, though that, too, continues. In result, the "proletariat" is steadily ceasing to exist in the United States, and now is not a serious proportion of its people. About eighty per cent of the American population has reached the "middle class," into which the "proletariat" of Marx is- progressively being absorbed. Of the remaining twenty per cent, less .than ten per cent can be called "poor" in the sense imagined by Marx, and that fraction is provided for so that no American need fear hunger. The American economic republic aims to abolish that ten per cent. Judged by experience it should succeed in doing so in the next generation.

The second Marxist assumption proceeded from his first. Because the wealthy would steadily absorb all wealth in the country, the masses would. steadily cease to be able to buy, and business enterprises would be forced to seek markets outside the country. Therefore, he thought a capitalist country would become "imperialist.;' Precisely the opposite has occurred in the United States. Increasing distribution of national income and of national wealth caused steadily expanding mass markets in the United States itself. American businessmen do like foreign markets-up to a point; but they do not need them, frequently do not greatly desire them, and have invariably

C

considered that their primary interests lay at home. American capital will go abroad where opportunities appear good; but there is no interest whatever in seeking imperial domination over outlets in underdeveloped countries, still less in a colonial system based on such markets.

Marx's third assumption was that growing concentration of wealth in ever fewer hands would lead to periodic crises of ever-growing intensity. Eventually such crises .would wreck the capitalist system. Factually, in the United States methods and means have been devised first to modify, and increasingly to prevent, economic and financial crises. Since 1933 the government has controlled the currency and credit system and has systematically used that system (along with other measures) to modify the periodic crises that Marx accurately observed a century ago and inaccurately forecast as inevitable in the future. During the past quarter-century, the United States has experienced no severe crises.

These have been limited to mild "recessions," have been reduced to wholly manageable proportions and (I believe)' are on the way to being substantially eliminated. There is little possibility now that an economic crisis as forecast by Marx will overturn-or even seriously disturb-the American economy.

Two evolutions are chiefly responsible for \lpsetting Marx's programme. The first was the separation of wealth from power. Some centralization and concentration of economic power are needed in modern industrial production. This was brought about by the growth of American corporations, and concentration of power in corporate managements. Wealth, on the other hand, was diffused directly among eighteen or twenty million shareholders, and indirectly to many millions more through institutions of all kinds. Being unable to imagine such a development, Marx could only propose as the solution that a dictatorial state monopolize all wealth and all power.

This is the system in the Soviet Union today.

Modern theorists, however, now know that monopolization of power produces much the same effects as monopolization of property. The Soviet Union today appears to be going through the kind of economic crisis Marx believed endemic in capitalism. The American economic republic is not experiencing that crisis, and need not do so.

Finally, Marx assumed that the concentration of wealth and of capital power would mean that the government of a "capitalist" country would become little more than an executive committee of capital and property owners. Factually, the Government of the United States stands above both the economic power of corporati0!1s, and above wealth and above private economic mecha¡ nisms. It can and has assisted in the distribution of wealth. It can and does modify the results of. the "free market" where it has not discarded or controlled the "free market" altogether. Ultimate control of all American economy thus lies with a democratic political State representing the

sentiment of its people. Ironically, the Marxist prediction came true in the Soviet Union: there the government is precisely an executive committee aimed to defend the new class of commissars and other holders of economic power. Equally ironically, the communist states, not their rivals, are pushing for conquest of foreign markets.

The American economic republic is far from perfection. Liberals like myself strain steadily to make it complete its tasks. It can-and eventually will-abolish poverty in the United States. It can -and eventually will-move to higher aesthetic levels. It has achieved the capacity to produce everything needful to achieve these ends-to realize the value system which the United States has but rarely discusses. Already it has provided the economic and material base to do everything, in reason, its people desire. It has done so under freedom and democracy, guarding the right of individuals to achieve their self-development in the fullest measure of which they are capable.

Meanwhile it has reduced the problem of e,conomic misery to minor proportions, and considers its first business to eliminate this. Its working class has been lifted to a middle class, able tQ' expect that their real income will increase by about onethird in every decade. The "proletariat" is headed for oblivion.

Acknowledging all its defects (they are many), the American economic republic has nevertheless accomplished more than any other system pre-. sently prevailing in any large country in the world. Clearly it is only at the threshold of its greatest realization. The irony of today's history presents the Marxist system as self-limiting: being doctrinaire, it does not evolve. The American economic republic, in freedom, has left classical capitalism in the shadows of history. It can evolve as far and as fast as the vision and will of its people develop and grow.

We may as well begin with property.

"Property" is an essential element in tbe American economic republic-but it is not the dominant element. Even the content of the word has changed almost completely since Proudhon in France began writing about it in 1839. The aim and content of property has changed: in the United States, it is now chiefly a resource by which men can solve their own problems in their own way, and can extend their personality without being dependent on the State or the will of any dictatorship. But property is no longer a prime instrument of economic power.

This almost completely changes the reasoning of the nineteenth century philosophers-as indeed, it has radically changed the theory as well as the practice of capitalism. In the twentieth century, the problems to be solved are problems of power divorced from property rather than problems of property on which power is based, and the power

centres are not the same-indeed, have increasingly little to do with accumulations of personally owned property.

This affirmation, surprising to individuals unfamiliar with the American system, requires explanation. It revolves around the change in organization of American industry and with it American finances. It accounts for the sweeping changes in the so-called "capitalist" system. It is coupled with the fact that, in the current generation, the American system has been able to produce more than enough goods to satisfy the needs of the entire American population for food, clothing, shelter and moderate comfort.

Both in aggregate and per capita, American production in goods and services is far higher than production under any other system in the world. Currently, its production of goods and services is running at the rate of about $600 thousand million annually; this is about $3,000 per person for every American. All of this product is not distributed to individuals; but through wages, salaries, rents, profits or interest and dividends on investment, distribution to individuals is running at the rate of about $465 thousand million annually-approximately $2,500 per individual.

The United States has thus disproved-at least in our time-the classic aphorism of Malthus and the British economists. They considered that population would always increase as fast as production; consequently most of the population of every country would always be living at the barest subsistence level-that is, in poverty, barely able to keep body and soul together. The American experience negates this assumption.

Despite the fact that the standard of living of its people was the highest in the world, in 1963 the American economy was running at somewhat less than eighty-five per cent of its capacity. It could without difficulty produce between ten per cent and fifteen per cent more than it produced in that year without substantial addition to its plant and capital. The demand of a people for goods and services ultimately depends on its cultural level-that is, on what its people want.

Wants increase as education and culture increase.

Apparently the United States can produce, now, as much as the cultural level of its people requires.

The typical nineteenth century capitalist owned a factory, or a mine, or a railroad, or a bank.

Because he owned it, he was 'master of it; it responded to the owner's orders. (This was the society which Proudhon attacked in 1840 and of which Marx wrote later.) By the third decade of the twentieth century, in America that system had weakened. In the thirty years from 1933 to 1963, it had aln:ost, though not wholly, disappeared.

Change came largely through a developing institution known as the "corporation," which increasingly became the vehicle of American production. By 1963, well over nine-tenths of all American production (aside from agriculture and direct government activities) was carried on by corporations. A predominant part-nearly three-fourths-of all of this was done by about a thousand very large corporations. About twothirds of it, indeed, is carried on by not more than 500 large corporations.

These corporations are not, and cannot be, "owned" by any individual.

They are far too large. What once was "ownership" is represented now by shares. These shares are distributed through the length and breadth of the United

States. There are, according to current estimates, about eighteen million individuals who own shares in American corporations, either directly or secondarily through mutual investment funds.

In addition, pension trust funds and other similar institutions, whose task is to accumulate savings and repay them to workers who have become unemployed or who have retired for old age, are increasingly large holders of such stocks. Their beneficiaries number between forty and fifty millions of individuals. Ownership of shares is gradually becoming part of the goal of most American families.

Like many American scholars, I do not consider this distribution adequate. It sti1l is true in the United States that about one per cent of the population holds about twenty-five per cent of all the personally owned wealth of the United States-though, under the American tax system they only receive about fifteen per cent of the income distributed to individuals. Their position is being slowly eroded. Marx, basing his theory on nineteenth century observation, assumed that the wealthy class must necessarily grow proportionately wealthier, while the non-wealthy must increasingly be reduced to the subsistence level prophesied by Malthus. This has not taken place. As the American system has worked out, while the small wealth-holding group has certainly remained wealthy, the rest of the population has steadily moved from proletariat into the middle class, and shows every sign of continuing to do so. The wealth-holding minority, very slowly, is losing ground.

Of greater importance was a companion fact.

As the corporate system developed, shareholders -the modern substitute for the nineteenth century "owner"~eased to control the operations of the productive enterprise. They ceased to be able t9 give orders-indeed, ceased to have anything whatever to do with the factory, mine, railroad, the communications system or the enterprise.

Quite obviously an enterprise needs to have an administration. This cannot be done by a vast assembly of stockholders; it has to be done by managers. The American Telephone & Telegraph Company with nearly 2,300,000 shareholders could not even meet with them, let alone get their advice or decision in operating its national telephone system, its scientific laboratories, or its Telstar satellite. It would be about equally impossible to expect 2,000 or 3,000 shareholders (a situation familiar in many smaller corporations) to do more than select their managers. In larger corporations, selection of managers almost necessarily falls to the managers themselves, whose word as to selecting their successors is usually final.

In result, the nineteenth century property unit has been split into two completely divergent elements. The stockholder has one of these elements-"wealth."

Dividends are paid on his shares and he can sell them in the organized stock markets. These are the only substantial attributes of share wealth.

The other element-actual control of things -the mine, the factory, the railroad, the oil refinery, the steel works-falls to the managers of the corporation. These as a rule have only a negligible percentage of the shares of the enterprise-sometimes none whatever. The corporation pays them a salary, often a handsome one. Some corporations like General Motors systematically aim to make their managers moderately rich. But their wealth is microscopic compared to the assets of the corporation itself. Their control is

not due to ownership-but to their offices as professional managers. That is to say, to their power~power granted them under the American system, as administrators of the corporation.

Power-but for the benefit of whom? This is a matter of discussion among economists. Historically, it is true, a corporation is administered to make profits for its shareholders. But it has come to be held to certain greater duties, running to the community's benefit. These are enforced, if need be, by the political authorities, and its managers are held accountable. One of these duties is to assure that there shall be a steady, available supply of the product-that is what the corporation is there for. And it must be supplied at a price which the community believes acceptable-the community has various ways of enforcing this obligation if it is dissatisfied with the price. Increasingly the corporation finds it has duties beyond that of merely maximizing profits for shareholders: indeed, that profits, though essential, are probably secondary to its obligation to supply the product for which it has become responsible, to pay wages satisfactory to the labour organization which represents and controls its workers, and to plan forward for the future growtjl of the industry.

The nineteenth century profit system and property with it have thus been transmuted. On the one side, the productive enterprise is basis for the issue of shares and other securities, distributed to individuals as passive "wealth."

The personally owned wealth of the United States may be roughly estimated at about $1,200 thousand million. More than one-third of this is "share wealth." Aside from agriculture (farms are sti1l individually owned), most personally owned wealth is not productive wealth but is used for consumption-the family home, the family automobile, the ice chest and domestic appliances, together with a fairly substantial item of residential real estate.

The result has effectively separated "wealth" from "power;" that is, from control over production and distribution. The process has been accompanied by a growing distribution of wealth -albeit too¡ slow for the liking of many American liberals. On the other hand, we find growing concentration of "power" lodging in the hands of corporate managements.

But the powerholding managers of the corporations are not permitted to deal with it as they please-in the sense that a nineteenth century property owner could do what he pleased with his own. They are obliged to respond to social demands, enforced, when necessary, by intervention of the political State.

Note must here be made of a changing theory of property-a change undreamed of in nineteenth century thought. Increasingly it is becoming clear that "property" and "power'; are not different from each other. Each represents a different phase in an on-going technical development. Power, unchecked, can do, will do, and does do, almost exactly what nineteenth century unchecked property did-set up monopolies, defend itself, seek to influence the State so that the State shall serve it. The communist experiment, abolishing property while monopolizing ownership and production by use of power, has produced much the same ruthlessness and inefficiency as did monopoly of property at the end of the nineteenth century and the beginning of the twentieth century. Some concentration of power is essential in modern technique. Some distribution of property is essential to personal life, independent of the State.

Equally, to achieve high production, concentrated largescale enterprise and with it concentration of power is a technical necessity. The political problem has been to achieve that degree of concentration of power essential for production and distribution-but to prevent abuse of that power so that it ceases to perform its function of production and distribution but is used for the private wealth or personal interests of the powerholder, be he commissar or corporation president.

The American economic republic on the whole has succeeded in doing this; hence its success.

While the American system drastically changed the incidence of property, it effected even greater changes in the institution known as "capitaL" "Capital" may be defined loosely as goods (including land as well as facilities and machinery) and assets (including working capital used for current operations) devoted to the production and distribution of goods and services. The nineteenth century theory and probably practice was that capital was formed by the savings of individuals who produced more than they consumed and devoted the excess of their production (or earnings) to capital use. The accumulators of capital determined what production they wished to undertake with that capital, and therefore were called "capitalists."

Owners of such capital, seeking profit on its use, were supposed to undertake production with it in those fields where profitmaking seemed most likely. In toto, this system was believed to allocate capital resources to productive enterprise in those enterprises which were most needed-as proved by the fact that profits and prices were the highest in them.

Mid-twentieth century shows a wholly different picture. At present in the United States, the chief source of capital is not individual savings. It is found within the operations of corporations, especially large corporations. Most of these no longer need to raise capital by requesting individuals to invest their savings in the corporation's enterprise. They themselves generate very nearly enough capital to renew and to expand their own plants and operations. They do this by selling their goods and services at a price. This price covers the direct cost of producing them, plus an additional item of "cost," being an allowance for the depreciation of their assets-renewal of past capital, if you choose. In addition, the price yields a profit to the corporation and roughly sixty per cent of this profit is distributed to the shareholders by way of dividends while the remaining forty per cent is accumulated by the corporation and added to its capital. The combination of the depreciation item together with the forty per cent of profits not distributed to shareholders increases the assets available to the corporation for capital renewal and capital expansion.

Manufacturing and mining enterprises in the United States generate more than sixty per cent of their needs for capital. Another twenty per cent of their capital needs they borrow from banks, largely in anticipation of future accumulation.

The remaining twenty per cent is provided from individual savings, chiefly by borrowing such savings from insurance companies, savings banks, pension funds, and similar institutions. Only a tiny fraction of "capital" is now raised by requesting individual investors to buy the stock of corporations. (Of this small fraction, most

goes to certain regulated industries such as electric light companies, and to new and untried enterprises where there is a remnant of the old "capitalist" process.) Capital formation goes on brisklybut the individual capitalist is gradually disappearing.

Capital is, of course, a constant in any system.

Communist governments also need to form capital, and for practical purposes, they do this either by taxation or by charging a price for the product of the State-produced goods, part of which goes to pay the direct cost while part goes to' forming capital. In this respect, the capital formation system of the Soviet Union begins to approximate the capital formation system of the United States, though in the United States nonStatist corporations are used. In both cases, the primary source of capital is the price of goods or services sold by the enterprise-not the thrift of individuals.

In the United States, there are other sources of capital more nearly allied to the old "thrife' system, except that they are involuntary. Contributions required from workers and employers alike for the great pension funds, established by the government and by private arrangement, are, of course, savings, but they are forced savings.

These are in addition to the voluntary "personal savings" collected by insurance companies and savings banks. Also, the government itself is part of the saving process. When the Federal and State governments collect taxes and apply part of these taxes to plant and equipment-roads, bridges, s,hools, State universities, hospitals, water systems-they are using a part of these tax moneys for capital equipment. They in effect conscript some of their taxpayers' income and use it as capital in enterprises carried on directly by the State. Here also the individual has little choice in the matter. ;He must pay his taxes; he must (if he wishes them) pay the price asked for the goods in question; he must, because the law or his union contract requires it, contribute to the pension trust funds. But he has nothing whatever to say about use of these savings.

There are, it is true, a few wealthy individuals who still desire to invest their capital in enterprises small in relation to large corporations, and there are many individuals who use their savings to establish small businesses. These are the survivors of the nineteenth century "capitalist."

They are valued in the American system though now a small fraction of it. Americans like to see a man tackle a small business, make it succeed, make .it grow larger-and eventually make it become the nucleus of a large corporation. This is one of the ways by which innovations occur.

But the total of all this is proportionately small.

Shift in method of forming capital has led to an almost complete change in location of economic power. No longer are individual owner"capitalists" as powerful as were the industrialists when Marx wrote Das Kapital. There are merely surviving instances of the old system. No longer are there "bankers" who controlled the collection of individual savings of individuals, and because they could dominate the market for capital, could also dominate industries-as did the Rothschilds in Europe or the Morgans in the United States. No longer do corporations go hat in hand to the banking community (still celebrated in mythology as "Wall Street") seeking capital, or seeking credit through commercial banks.

Rather, the commercial banks go to the corporations, begging for deposits and their service business, while "investment bankers" must rove

the country seeking enterprises which need capital.

Control of the flow and application of capital is, in ultimate analysis, control of the current of national economic development. By mid-twentieth century, and especially today, that control now lies partly in the hands of the Federal government (and, to a less extent, of the governments of the States) but chiefly in the hands of the administrators of the great corporate enterprises. Government and corporations being today the chief collectors of capital, they have become the agencies by which capital is allocated to one or another form of investment. Perhaps twenty per cent (probably rather less) of capital .formation-the amount resulting from personal savings--eomes into the hands of banking institutions, notably insurance companies, trust companies and the like. These still have power to choose investment.

But their power is restricted by custom, by law, and by opportunity. And the total amount over which they have control is rather less than a fifth of the annual capital formation of the United States. .

Meanwhile a rapid change goes forward in the actual quality of "capitaL" We noted that capital consisted of those assets devoted to production of other goods and services. In the nineteenth century these assets could be seen, touched and felt. Adam Smith and Ricardo, Proudhon and Karl Marx, all knew what they were. There was the cotton mill with its looms; there was a railroad with its tracks; there were the forges, and iron or coal mines with their rudimentary machinery. This was "capital."

Today, the "things" are still there-though vastly developed. Ricardo and Marx would have recognized as capital the huge plants of General Electric or General Motors, the great furnaces and forges of U.S. Steel, the retorts and machinery of the producers of gasoline or chemicals. But behind all this is a new and added item of capital, changing much of its content. No name has yet been assigned. It is loosely called "technical knowledge" and sometimes appears in corporate balance sheets as "Patents & Processes." The General Electric plant would lie dead, were it not for laboratory and scientists, some engaged in pure research, others engaged in application of its use. The scientist's product may be as simple as a few pages of formulae on a piece of paper or a small volume of noted experience as to how the formulae can be used. This knowledge is, of course, "capital."

But it cannot be seen, felt or weighed; and it is almost impossible to assign it a value in dollars. It is sometimes called "incorporeal capital." It does not follow any of the normal rules of nineteenth century property. No one knows where it came from-scientific development is a product of the entire history of the human race. Much of it is due to research carried on by the corporation itself; or by government at public expense and made available to those who can use it. Research in nuclear energy, space research and a vast amount of electronic and aeronautical knowledge are examples. Who can be said to "own" it? Its use involves a staff of scientifically trained men; these are living human beings. They may be almost called living "capital."

At this point another element of modern "capital" enters-the indefinable element of "organization."

Capacity of a corporate management to maintain an organization able to accumulate, use and apply technical knowledge is crucialmore crucial, in fact, even than physical plant. If tomorrow the General Electric plants-the "things"-were destroyed but the organization remained substantially intact, it is certain that

General Electric could reconstitute itself in a relatively short period of time. But if the "incorporeal capital," its technical ability and its organization were destroyed, the plants and equipment would be little more than junk. Already it is clear that "capital" equipment a generation hence will rest far more on theory than on plant.

More has shifted here than the methods by which capital is generated, or the location of control power over it. Its actual substance is slowly moving away from ownership of any kind towards groups of men having a specific intellectual equipment.

This sort of capital is escaping from the property mould. Capacity to use it, and organize its use, rather than any ownership title is the requisite for its control.

The Tamed "Free Market"--Its and Limits Simultaneously

with

these

Use

developments-

poss;bly because or them-the American economic republic has dealt with the ancient conception of the "free market" on a realistic basis. Here, probably, economic theory is evolving more rapidly than in any other single respect.

In the nineteenth century, a free market was somehow assumed to be a basis for human freedom. French physiocrats like Quesnay believed (as did Proudhon in later life) that a man could not be free unless he had some piece of property with which he could produce--else he was a mere plaything of a dictatorial state. Adam Smith, writing before the French Revolution (his great work, The Wealth of Nations, came out the same year the United States declared its independence of Great Britain), followed that theory. This was natural. Continental Europe only began to emerge from absolutist monarchies when the Bourbon dynasty fell in 1789. The absolute sovereign who controlled the persons, property and economic activities of his subjects continued throughout much of Europe until

seek those areas where buyers most wanted the product. Labour was considered a commodity.

In a free, that is, a competitive, market, the best available equation between the price of labour and the employment requirements would be struck.

There is, nevertheless, difficulty with this classic theory-as the United States has discovered.

The most notable is that the free market will not stay free unless some outside power-the State, in fact-<:ompels it to remain so. Left to themselves, enterprises in the free market will not indefinitely compete with one another. They will combine, and set up monopolies or cartels. Or, the strongest, by his competition, will bankrupt the weaker and emerge as a monopoly. Something very like this, indeed, did occur in the United States at the close of the nineteenth century-as it also occurred in great parts of Europe, possibly continuing even to this day.

This led the United States in 1890 to pass the Sherman Antitrust Law and, after a decade of waiting, to commence its vigorous enforcement.

better than reliance on some Orwellian Big Brother, with a hierarchy of police, imposing his will by economic pressure.

The American today is faced with a problem apparently new in history. For the first time, nine-tenths or more of an entire population (aggregating 192 millions) does not have to think, "Can I live next year?" but instead, "How do I wish to live next year?" Until relative recently, few philosophical questions were presented to a national economy. Hungry men should be fed: no question. Sick persons should, if possible, be cured: no question. Decent shelter should be provided. Theologians or savants were not needed to determine that. Until a minimum standard of living was readily available, the American did not have a great range of economic choices available. Today, he does. More accurately, most of them do; there remains a steadily diminishing margin of individuals still too poor to do more than struggle for elementary comfort. Of these we have a word to say later; enough here to point out that nine-tenths of the American

Iihas since Been re-enrorced

by other laws, notably the Clayton Antitrust Act, by creation of the Federal Trade Commission and the setting up of an active unit in the Department of Justice to enforce these acts. In combination, these amount to powerful intervention by the State-for the purpose of maintaining the free market-within certain limits. Withdraw these State activities, and the free market in the United States in all major lines would probably disappear in a few years.

Again the free market, as Americans see it, has a number of useful attributes. It can maintain a degree of competition. This means that the corporations, competing with each other, keep their prices within reason. Monopoly being prohibited, no one corporation can oppress a customer by refusing to supply him; he can go to another supplier. The free market does mean that many private enterprises are constantly seeking new outlets for their organizational ability and their capita\. This means a high degree of innova-

th~ Revolution of 1848. NlllUflllly, j;erfillps,

tion.-new ideM, new Il'r~S~M, new gervieeg

nineteenth century economists. proposed the theory of the "free market" as anti-thesis to feudal or state-monarchist economic systems prevailing when the eighteenth century drew to a close. Even today in the United States a strong minority of old-fashioned economists still believe that individual freedom must have a "free market" as its base.

This idea-that of the "classical economists" represented by the Austrian Ludwig von Mises and in America by his disciple, Freidrich von Hayek-is rapidly losing ground. Modern theory is not that a free market makes free men. Rather free men make a free market-and take it or leave it, limit, modify or reject it. In the United States at present a large sector of economic production and distribution is carried on under the free market system. But the free market has

and an economic system seeking primarily to satisfy the wants of a large population, testing itself by what the population does want-rather than by what someone in a commissariat thinks the population ought to want.

The difficulty lies in the waste, even the frivolity, of some free market activities. Much of this current criticism is true. It is not always easy to defend a system which rewards the creator of a new mouthwash as highly as it does the publisher of first-rate books or the producer of first-rate plays. The free market sometimes seems to satisfy or even debase cultural levels rather than to raise them. The American economic republic, nevertheless, has always been cautious at this point. It rarely tries to tell its population what they must consume, considering that control of a man's consumption comes perilously close

population can decide whether it wishes a second television set or a summer vacation: whether it wishes to live in a hovel but to have a good automobile and a Florida holiday or prefers a gracious house with a library. Put differently, the American public is now faced with making up its mind: "What is a good life?" There is no record that such a choice was ever presented to the whole population of a large country at any previous moment in the world's history.

This, indeed, will be the problem underlying much of American political activity and on its results will depend the direction of the American economy. For in these matters, the "free market" does not lead-it follows.

The "free market" has, nevertheless, been dethroned as omniscient god from the machine.

American political development has made clear that in some economic areaS it did not want the free market at all, and in others did not wish certain results which the free market regularly developed; and in activities such as transportation, the American system between i~M and 1935 eliminated the free market system altogether.

Most forms of transportation, by rail, auto bus, airplane, or water, were taken out of free market operation. The travellers had a choice of airplane, ship, bus, or other means, but the prices or rates they were allowed to charge were fixed by the State. In return, these enterprises got the security of a more or less monopolistic position.

Rates were so set that the enterprise could make money-within reasonable limits-but the enterprises themselves were made "quasi-public," required to'work within limits and rules the State set.

Next in a number of industries nominally free (the oil industry is the notable instance), the American republic presently decided that there must be a reasonable continuity so that production must be reasonably related to demand.

In these industrie.s (oil, sugar-to a less extent,

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\Q ~~inl ~9mrQl ~f hi~IifQI Th; 1~~~mD\igfii

non ferroll~ mB(fil~), tMre lr mn Of I~u

able State influence.

Classical economics taught that all useful economic activity would be motivated and brought into existence by the desire to make profits; also that in a free market the aggregate of economic activity thus sparked by hope of gain would best allocate the resources of the nation-would allocate part of production to "capital" and part to "consumption;" would set up prices for goods so that the supply would be best allocated to need and want. Under this spur, production would

that Americans must choose their own way of life, and consequently what they will consume.

This, some argue, makes for a "bad civilization."

Possibly. Certainly it is plain that in the next few decades the greatest problems in the United States lie not in the field of production or even distribution but in the field of education and cultural advance: in education, in taste, in ::esthetics. The American reliance on the free market system for a substantial part of its production is certainly not ideal. Yet it is considered

developed national plans. Their chief characteristic is that consumption is estimated, and that arrangements are made so that the domestic production plus imports from abroad will substantially equate to the estimated consumption.

The effect was to eliminate in whole or in part the wild fluctuations which used to take place in the uncontrolled free markets.

Third, in the second decade of the twentieth century, and continuously thereafter, practically all American agriculture was also taken out

@

of the free market system. Oscillations of price had meant steady grist of farms and farmers thrown into want, bankruptcy or despair. In agriculture, America found the waste of this fluctuating free market economy so great, and its human cruelty so intolerable, that it discarded the system. Most major agricultural products today are sold at or around prices supported by the State. Increasingly attempt is made to regulate production, bringing it into line with the probable consumption. One result has been a great surplus in the production of American foodstuffs. Though an appreciable burden on the American taxpayer, one remembers that while many countries have been wrecked by not having enough to eat, never has a country foundered because it had too much.

In the field of wages, employment and labour conditions, the free market theory was severely modified in America a generation ago. This was the effect of the National Labour Relations Act

of

l~m.In

that field, the United States was not

prepared to continue the fluctuations, the waste and the sheer cruelties of an unrestricted competitive market for labour.

Throughout the whole nineteenth and early decades of the twentieth centuries, these wastes and cruelties were clear enough for any to see.

They grew greater as large corporations grew in strength and power. No individual, offering his services for hire, could "bargain" on equal terms with a huge corporate employer. As large enterprises increased, there were relatively fewer "buyers" of labour, and there were increasing millions of labourers seeking to sell their services.

Save in a very few trades where skilled labourers were scarce, the worker (for all practical purposes) had to take what the employer offered himwhen he offered it and as long as the employer wanted to give it. Often the results were as ghastly as any described either by Karl Marx or Charles Dickens. The system produced sweatshops where men, women and children toiled for the merest pittance. They produced the twelve-hour day, six days a week (and seven every third week) in steel mills, reducing human life almost below the animal level. Even where conditions were tolerable and wages sufficient to sustain tolerable standards of living, the labourer held his job at the whim of the employer, and an employer could, without notice, throw all or any part of his force out of work and on the street. If the employer was in a line of production where competition was keen, the price of the product was forced down-and the employer correspondingly endeavoured to reduce the wages he paid.

One result was the growth, gradual in its 'early stages' and more rapid after the turn of the century, of labour organizations and labour unions. Their right to organize was bitterly conte;ted. Yet, increasingly, there was recognition of the human facts. A free market in goods is one thing; a free market in conditions of living is something else. By the second decade of this century, labour unions were accepted as a fact; indeed, the growth of unions more or less parallels the growth of the large American corporations. In 1914, the Congress of the United States enacted as part of President Woodrow Wilson's programme, a declaration that the "labour of a, human being is not a' commodity or article of commerce" and that

lllBQllf '}fiilniililliQn~ wm "conspiracies

in restraint

n2t of

t9

trade,"

p~ b~IQ In 1932,

N ppi~-UGuuftiR Am ~uunr@ly @~~"'~{@d labour unions from the operations

of the anti-

trust laws and forbade courts to issue injunctions against strikes. The really modern handling of the problem came with the enactment of the National Labour Relations Act in 1935. This directly declared the right of employees to form, join and assist labour organizations, and gave such organizations the right to "bargain collectively through representatives of their own choosing" for their "mutual aid and protection" and especially in making agreements with employers for the purpose of governing wage rates, hours of work and conditions.

In ensuing development, labour unions in most of American industry became bargaining agents.

Contracts of employers with labour unions determine wage rates, hours of work, and conditions under which labour is performed. Such contracts also frequently set up (in addition to the governmental system) additional welfare provisions. These commonly include pension trusts, paying to the retired worker added amounts of old-ase assistancel and also establishing funds which pay his hospital expense and a certain amount of medical care in case of illness.

Increasingly they move towards giving to the worker an odd variety of vested rights in his job and, if the worker is discharged or the enterprise goes out of business, severance pay.

Capacity to make and enforce labour contracts really turns on the now legally recognized right to strike. Since under existing labour legislation, it is difficult in case of strike for the employer to get non-union labour, a strike results in closing down the enterprise until agreement is reached.

The rights of labour are, therefore, very well protected. Actually, wage rates have steadily risen with the national income. A labourer can expect that his "real wage" (the actual purchasing value of his pay) will increase about thirty per cent in each decade-this at least has been the experience for the past thirty years. In practice, labour now has power to acquire a substantial share of the increasing production of the American economic system.

The result, for practical purposes, is that in the greater part of American industry wages are determined by agreement between two power-holding centres: the labour unions and the corporate managers. Their power is very nearly equal. Labour's right to strike, nevertheless, when exercised, may damage not only the employer but the entire public. Already we are reaching a point where need is evident for some better way of settling these controversies than by strike. That problem is still unsolved, though compulsory arbitration required in a recent dispute between railway workers and the American railroads may become a prototype. [Editor's Note: Congress required both parties to the dispute to accept the decision of arbirrators on certain items in dispute, but not the whole range of contested items.]

Yet, despite the obvious problems, the present results of American labour legislation are a vast improvement because they are vastly more human than the "free market" system. In labour, no one wishes to go back to it. Finally, the Federal Government has enacted a minimum wage law forbidding any employer whose goods flow in interstate commerce to pay less than $1.25 an hour and requiring that social security benefits be collected providing for benefits in case of unemplorment and for old-aie pensions.

In summary,

the American

economic system

in the prOVISion of electricity and other forms of energy, and has substituted a regime of regulated monopoly or quasi-monopoly with the State fixing the price of the product. In agriculture, the State maintains prices of products at support levels. In labour, the State permits wage levels to be determined by contracts between employer and unions reached through collective bargaining, and has endowed the unions with power sufficient to give them at least equal positions in making such bargains. In perhaps half of the economic system, the "free market" is maintained-indeed sedulously protectedby the Federal Government, though in that sector in certain industries (we have noted oil, sugar and non-ferrous metals) stabilization arrangements have been reached.

As a generality, wherever the free market system does not reach an acceptable resultmeaning thereby that it does not supply the wanted goods and services, or does not supply them at an acceptable price, and does not pay adequately for its labour and its supplies and fails to maintain at least moderate stability of conditions-the Federal Government intervenes.

Political decision, in ultimate analysis, thus can limit, modify or change any arbitrament of the free market. In many fields, it has already done so.

Political Organization of the American Economic Republic In 1933 the Government of the United States assumed responsibility for the functioning of the economic system. The step came relatively late.

The BritiSh Government had begun to assume this responsibility under Lloyd George in 1912.

The Soviet Government took over complete responsibility in 1917. In Italy, a Fascist Government did likewise in 1924, as did the Nazi Government in Germany in 1933. The world-wide economic crash beginning in 1929 accelerated the process.

In the United States there was no thought of totalitarian government; President Franklin D. Roosevelt and his Administration assumed responsibility but under a democratic system.

In the ensuing 100 days after his inauguration the Federal Government under legislation passed by the Congress obtained ;>ower to deal with almost every phase of American economic life, and perfected that power in the ensuing years.

This action will always be associated with President Roosevelt's name, and rightly so.

It is no denigration of him to add that the prevailing chaos would have compelled almost any elected government to do the same. The nineteenth century theory-that natural economic forces would work out a tolerable balance in economics-proved unworkable. In the United States as elsewhere in the world there was general agreement that men must shape economic forces, and that blind economic forces could no longer be allowed to make sport of men. Nineteenth century laissez faire theory had assumed that economic forces were natural phenomena like the weather. One might alleviate some of their results, but that was all. Twentieth century . theory discarded that thesis. '[he American conception differed markedly from the totalitarian conceptions emerging in Russia, in Italy and in Germany, and to some extent

elsewhere.

Ultimate

political

decision

hu ~II but ~liminuedthe "fr~c muter in

mu~tb mBUby 'h 616m6U f6pnn6nlRtiY6l of

transportation

a whole people, functioning in a society which

of all kinds, in communications,

guards freedom of speech, freedom of organization, freedom of thought and free choice of government.

Americans do not oppose the idea of private property; they wish it better distributed. They do not amuse themselves with ideas of class war; rather, they hope to set a minimum base for every American, yet allowing every American to go ,as far as he can in personal development or in wealth. Americans do not wish to enthrone the proletariat; they intend, if possible, to abolish the proletariat.

This was the conception behind President Roosevelt's "New Deal," whose thinking dominated the ensuing thirty years of American life.

As the institutions have developed and have been embodied in legislation or (in some cases) in written rules, the political structure has reached a definite pattern. It falls into two premisessubstantive law and the administrative organization.

The Government of the United States holds direct power over the economic system through certain powers granted to it in the Constitution.

Chief among these are: To regulate commerce with foreign nations, and among the several States.

To borrow money on the credit of the United States.

To coin money [and) regulate the value thereof.

To lay and collect taxes, duties, imposts, and excises to pay the debts and provide for the common defence and general welfare of the United States.

To establish post-offices and post-roads.

To lay and collect taxes on incomes, from whatever sources derived.

Each of these powers. has been interpreted very broadly. For example, power "to coin money and regulate the value thereof" includes power to establish and regulate a banking system, bank credit being now a recognized form of money. Each thus has become authority permitting the government to intervene in or guide economic processes. Yet the government is subject to certain constitutional limitations, aimed to protect individual freedom, notably: "No person shall be ... deprived of life, liberty, or property, without due process of law,' nor shall private property be taken for public use without just compensation." [Amendment V] "No State shall ... deprive any person of life, liberty, or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws." [Amendment XIV] "A .. , corporatio~ ... is a person within the meaning of the Fourteenth Amendment declaring that no State shall deprive any person of property without due process of law, nor deny any person within its jurisdiction the equal protection of the laws." [United States Supreme Court, by Justice Harlan in Smyth v. Ames, 1897] In combination, these maintain the private property system in the United States-though subject to government regulations. Oddly, they also have had the effect of protecting the operations of corporations since corporations are held to be "persons" within the meaning of these constitutional provisions.

Perpetuation of the free market system (unless Congress otherwise rules) is contained in the Sherman Antitrust Law of 1890: "Every contract, combination in the form of

is the Bureau of the Budget. The name is somewhat misleading. Its Director is also an economist.

He and the Bureau do, indeed, draft the annual budget after consultation with the various departments seeking appropriation of public moneys.

But, in addition to the assignment of funds, there is also the question whether the budget shall be so handled that there will be a deficit requiring government to borrow money, and expand the currency base, or whether it shall be balanced, maintaining the status quo, or whether a surplus will be sought, tending to contract the currency. Taxation is handled so that the result sought will be attained. In general, it has been assumed that a budget deficit stimulates commer: cial and economic activity, while a budget surplus tends to reduce it. The instrument is thought to be and in various circumstances can be a powerful lever for accelerating or slowing down commercial activity-for levelling off a boom or for preventing or repairing a recession.

Third in the list comes the Treasury Department. Traditionally, and by his office, the Secretary of the Treasury joins in consultation concerning taxation, the budget, banking affairs, management of the government debt, and measures taken in connection with foreign exchange. Where taxes are levied and how they are collected have a great deal to do with the functioning of business.

trust or otherwise, or conspirdcy in restraint of trade or commerce among the. several States or with foreign nations is declared to be illegal."

[15 USCA 1] .

Assumption of economic responsibility and authority by the Federal Government came against this background of general law. Determination to do so was a political act in 1933 finally made explicit by the so-called "Employment Act of 1946." In that law, the Congress of the United States declared it to be "the policy and responsibility" of the Federal Government to use all practical means "to co-ordinate and utilize all its plans, functions' and resources for the purpose of creating and maintaining, in a manner calculated to foster and promote free competitive enterprise and the general welfare, conditions under which there will be offered useful employment opportunities, including self-employment, for those able, willing and seeking to work and to promote maximum employment, production and purchasing power." [15 USCA 1021] Finally, the Federal Government is thus expected to use its "functions and resources" not only to promote competitive enterprise and conditions under which employment opportunities will be offered but also "to promote maximum employment, production and purchasing power."

It can steer investment and operations into some

The President of the United States, as Chief of State, has responsibility for directing the economic course of the United States. In doing this, he must follow the direction laid down by the Congress,including the direction given in the Employment Act of 1946. Conflict may arise between the goals of "maximum employment, production and purchasing power" and the results of free market operations under the antitrust laws. In such case, the President is expected to recommend legislative modification, suspension of the antitrust acts in stated situations, or other measures. Competition, the darling of the nineteenth century, is retained, partly to police the business enterprises and keep prices from becoming monopolistic, and partly to stimulate growth.

Yet, if the results are unacceptable, the Congress may, as we have seen, remove operations from the free market principle.

The privy council of the President is his Council of Economic Advisers, set up by the Employment Act of 1946. These, by law, must be professional economists, or men of experience in the field.

They must be able to interpret economic developments, to appraise government programmes and activities, to observe trends and recommend policies. They are the appointees of the President and they work with an excellent statistical staff.

Monthly, for the information of the Congress and the public, they are required by law to publish a review entitled Economic Indicators, affording a continuous audit of the behaviour of the American economy.

The President, annually, must make the economic report to the Congress, usually drafted for him by the Council of Economic Advisers.

This report is at once referred to a Joint Committee of the House of Representatives and the Senate which promptly holds hearings. The conclusions of the Joint Committee in theory are supposed to guide all other committees of Congressthough in fact they are merely advisory.

A second organization subject to the President

fields of business and away from others. Tax measures can assist certain fields of investment and retard others. By consequence, the Council of Economic Advisers, the Bureau of the Budget, and the Treasury between them, hold top position in the management hierarchy of the American economic republic.

In somewhat different position, yet co-ordinated with them, is the central banking mechanism known as the Federal Reserve Board. Unlike the other three agencies, the Federal Reserve Board is not responsible to the President of the United States, but directly to the Congress. It is, in legal phraseology, "an independent agency," not part of nor responsible to the Executive Branch. From time to time, indeed, the Federal Reserve Board has differed with the President. In general, nevertheless, the co-operation between the Federal Reserve Board, the Treasury, the Bureau of the Budget, and the Council of Economic Advisers is very high. Though the President cannot give orders to the Federal Reserve Board, he can request legislation from the Congress changing the Federal Reserve Board's powers. This has never been necessary; it is merely an ultimate control, lying as it should in the hands of the elected legislature.

Federal Reserve Board powers are completely pervasive. Through its operations it can virtually control the amount of credit and currency outstanding at any given time. There is no space here to detail the various' specific methods by which this can be done. It acts through the Federal Reserve Banks in the twelve districts into which the United States is divided. These twelve banks (nominally privately owned since their stock is divided among the banks which are members of the Federal Reserve system in their district) are in all practical effect government agencies.

Direct handling of commercial credit is entrusted to privately owneq and privately operated banks. They make the loans. But the Federal Reserve Board can create conditions making it unprofitable or difficult for banks to expand credit-or, alternatively, unprofitable and difficuLt for banks not to do so. The chief uncontrolled func-

tion is the power left to the private commercial banks to choose to whom they will or will not lend money.

That power (it could be extremely onerous if abused) is nevertheless checked partly by competition (there being 15,000 or more banks chartered inthe United States) and partly by public opinion.

The head of any large American bank knows perfectly well that his is essentially a public institution; and that anyone having the character standing to make him a credit-worthy risk must be accommodated. When in 1908 and afterwards, a battle was fought over the existence of a so-called "Money Trust," or monopoly combination of bankers, the public reaction was clear. The situation prevailing in Europe under the Rothschilds, and briefly in the United States in the first and second decades of this century under the leadership of the then very real (and now mythical) "Wall Street," excited violent public reaction. Today, every major banker knows that were the situation to be recreated, the government would intervene at once. Either it would charter a great number of competitive banks, or at extreme, it might nationalize banks themselves. No one cares to risk this result.

In controlling the supply of credit and causing its expansion or contraction, the Federal Reserve Board has assumed another function, also by unwritten law. By expanding or contracting credit, it is expected to discourage unhealthy booms and to prevent depressions or recessions. It has been surprisingly successful (by comparative standards) in doing this. Prior to the Federal assumption of responsibility in 1933, the fact of the "business cycle" was assumed. In theory, about every seven years there would be a slump, if not a panic.

Business would climb out of its depression, would become increasingly prosperous, would reach the high point-and would then experience another severe decline. Since the outbreak of World War II, depressions in that sense have been virtually unknown. There have been minor recessions 'and minor booms but they have not even remotely approached the intensity of the panics of 1903, of 1907, of 1914, of 1921 or the great depression that began in 1929. The problem of eliminating booms and depressions has not been wholly solved, but substantial progress has been made.

[Editor's Note: Students of the American economy who might feel that the Securities and Exchange Commission has not been listed as a regulating agency of the financial market which trades in stocks and bonds are referred to this comment from Mr. Berle, who helped draft the legislation establishing this commission: "The Securities and Exchange Commission, in theory, does not put a haIter on the money marketit merely requires full disclosure. Factually this may exercise some' restraint, but abroad there is a tendency to confuse the SEC with a committee or commission controlling capital issues such as exist in the Netherlands and elsewhere. In theory, the SEC is merely a policing arrangement."]

Below the fiscal and monetary machinery are a series of specific agencies dealing with particular sectors. They may be classified approximately as follows: First, sectors in which government directly carries on an economic function. Included here are the conventional government functions of providing roads, post offices, government services.

These have expanded somewhat in the past generation though less fast than government sectors have expanded in Europe. The government directly provides electricity in great parts of the country through government-owned, power-producing dams. In the southeast it has done so through a great public corporation, the Tennessee Valley Authority. In most areas, the Federal Government in combination with the State government agencies provides low-cost housing, financed by bond issues guaranteed by the Federal Government. (In New York, for example, the public housing authority is far and away the largest landowner.)

In this government sector obviously fall the vast tasks of national defence. At this point, the line between the government sector and the private sector ceases to be distinct. In handling defence supply of all kinds, the initiative is that of the government. But the method is commonly that of contract arrangements with private corporations.

Because the government is the only buyer, it determines both what ¡sort of supply shall be produced and in considerable measure the methods to be used. Under this arrangement, among other things, the government makes contracts with many institutions, academic as well as commercial, for scientific and similar' research. .

Second, a sector of activity carried on by private initiative but under government regulation.

Here a series of specific regulatory commissions have been set up. Among them may be mentioned the Interstate Commerce Commission (land transport); the Civil Aeronautics Board (air transport); the Federal Power Commission, regulating interstate electric power and natural gas and oil pipelines; the Federal Communications Commission, regulating the use of radio and television, telephone and telegraph; sea transport and shipping, regulated and in part financed by the Maritime Commission; credit for home ownership, provided through the Federal Housing Authority.

These are supplemented by the regulatory commissions of the various States, whose primary purpose is handling distribution and rate-making of local transport and electric light and power. Reliance is placed on private initiative and private capital, but the companies entering the field must conform to the rules laid down by the regulatory commissions.

Analogous to this is the reliance placed on private initiative to organize and carryon commercial banks. Considerable reliance here is placed on competition. The government compels no one to enter banking-men do so because they can make a profit. But permission to form a bank must be granted either by the. national government (the "national" banking system) or the State governments. Both State and national banks must depend on access to the facilities of the Federal Reserve System. Acceptance of a commercial bank as a member of the system is crucial, and to maintain membership these banks must submit to inspection, regulation and the rules of the Federal Reserve.

Third, a sector in which private initiative in a free market is relied on to make the machiIie move. Closer research into this sector, however, develops the fact that a number of the great industries are partly removed from th~ operation of the "free market." The gigantic oil industry, for example, works under a national plan requiring that the cpnsumption requirements of the country be estimated monthly. In turn, the regulatory authorities of the oil States, under a

compact arrangement, endeavour to limit the amount of oil extracted so that these amounts, taken together with imports, will about balance the consumption. The oil companies themselves are competitive, sometimes fiercely so, but within the framework of this balance. A somewhat similar system governs the sugar industry and, less formally, the non-ferrous metals (other than aluminium, which is manufactured rather than extracted).

In the remainder of the manufacturing field, reliance is placed on unregulated private-that is, \non-Statist-corporate initiative. The motive is private profit, and the control is competition.

As has been noted, the over-all framework here is supplied by the various anti-trust acts designed to prevent monopoly, to prevent combinations in restraint .of trade, to prevent mergers which would appreciably restrain competition and generally to keep alive a free market which otherwise might disappear.

Fourth, the sector composed of labour and its markets. Reference has already been made to it.

Reliance is placed upon collective bargaining between labour unions whose right to organize and bargain is protected by the Federal statute today known as the "Taft-Hartley Act," enforced by the National Labour Relations Board. A bottom limit is set-the Federal minimum wage. There are limits to the validity of the collective bargaining process since its ultimate sanction is that of a strike-and strikes, like war, are beginning to be too costly to be effective. In this field the development of the position of the Federal Government is active.

Changes can be expected in the next few years.

Over-all, the system has worked perhaps better than any other. The Ame.rican labourer has been able steadily to secure a substantial share of the increased American productivity. Judged by past experience, he can count on improving his real wage by about thirty per cent each decade.

The problem looming in the future-unemployment due to automation-we will discuss later.

Neither government production, nor private production responding to government initiative, nor the licensed carrying on of activities in regulated industry, nor the stabilized or un.stabilized free market, prevents some sectors of population from faIling into want. This may be due to illness, to the inevitable onset of old age, to the hazards of fluctuating employment, or to plain human incapacity. In the nineteenth and early twentieth centuries, it was assumed somewhat naively that private charity or benevolence would adequately take care of these areas of poverty.

This problem was not peculiar to the United States. As early as the era of Bismarck in Germany, and later in the days of David Lloyd George in England, more enlightened States moved to alleviate the lot of those groups.

The United States came at this task as a result of the economic depression beginning in 1929.

In the ensuing years a system of social legislation was built up, familiarly known as "the Welfare State." The system is not ideal, but is substantial.

No American need be seriously afraid of starvation. More recently, indeed, the conception has b:;en growing that "poverty" (meaning thereby at this stage of development a family with an income less than $4,000-$5,000 per .year) is

itself discreditable to the American economic republic. Moves forward in this field have already begun.

Most of the American working population is required to pay a certain amount of its wages into the "social security funds."

These are administered by the Federal Government through the United States Treasury. Employers are required to contribute an equal amount. From these funds are paid old-age pensions at a cerfain age, and allowance in case of unemployment.

Unemployment allowances are about equal in purchasing power to the pay of a full-paid, fully employed workman in Czechoslovakia.

Old-age pensions vary with' the pay of the employee; they approximate a,t present an average of about $1,600 per year per person.

In addition, in most highly organized industries, the government social security allowances are suppleJ!lellted by private "pension trust" arrangements. These are not uniform. They also provide for the accumulation of funds in the hands of private trustees or of great insurance .companies. From them are paid to workers additional old-age allowances, sickness allowances, unemployment allowances and so forth, depending on the specific arrangements. Taken together, the aggregate of pension trust funds-over and above the government social security fundsalready amounts to something over $50 thousand million and is rapidly increasing.

For those who are not employed, and perhaps never have been, the Federal Government, the State and local governments, working together, provide relief allowances. Here the problem of poverty really resides. Determined attack on "pockets of poverty" (to use a familiar cliche) has just begun. Since at greatest, not more than ten per cent of the population of the United States is involved, the American economic system is clearly strong enough to eliminate these sectors. Yet, also clearly, the problem is not merely one of economics. There is a high correspondence between the lack of education and poverty, and between lack of individual or family responsibility and personal distress. As the problem emerges, it raises the double question of steering some of the American economic productivity towards these sectors, and at the same time providing a better and more effective training with opportunities for this sector of the population.

The American economic republic appears to have quite adequate capacity to produce-and capacity to expand production up to the limit of foreseeable demand. At date of writing, indeed, its current production is estimated to be about eighty-five per cent of its actual, present capacity. For practical purpo.ses, it could produce about fifteen per cent more than it does at present without serious strain-and probably would be increasing its capacity in the process. Its primary problem is that of increasing the effective demand of its population-specifically, of putting more purchasing power into ~he hands of its least prosperous citizens. Americans consider that about twenty per cent of the population are not as prosperous as they should be.

This could be done mechanically by the simple process of increasing welfare and other benefit

payments to this group. The result would be to increase demand for products which would promptly be manufactured and distributed.

Unhappily, social problems are not so simply solved. Increase of benefit payments to the unemployed, or to the poor, leaves them on a variety of "doles," without real participation.

This problem is increasingly seen as a result of the intense mechanization of American production-a process frequently labelled "automation."

Production can be increased (no problem there) but rising production will not mean a proportionate rise in the numbe~ of jobs. This problem appears to be new. Until the latter part of the 1950-1960 decade, introduction of machinery and labour-saving devices generated more employment than it displaced.

At some point in the last decade, this equation seems to have been upset. Thereafter, increased mechanization meant increased production-but did not mean corresponding increase in the number of jobs. Debate goes on among America'n economists, some maintaining that the classic equation will reconstitute itself. But, I think, the probabilities are otherwise. The United States will continue to mechanize, will continue to increase its production and its capacity. But in the absence of some new force, it will not .proportionably increase its demand for labour.

The result is a slow growth of unemployment, and a major problem ahead.

American statistics show approximately five per cent of the labour force as unemployed.

Under the different European statistical methods, the computation would probably show less than 3.5 per cent of our labour force unemployed.

In terms of aggregates, this is not particularly burdensome. In terms of social justice, however, it is intolerable. One effect of automation is that the unskilled, and. the inexperienced youth, have greatest difficulty iri' finding jobs. They' can be adequately supported with welfare payments, but tend to become a frustrated and unhappy group. No society has a moral right to accept a growing pool of unemployed as a part of its being.

Meeting this problem is a task for the State.

Many unfulfilied needs or at least wants are apparent. Slum clearance should be proceeding with far greater rapidity. Were it seriously tackled, more production an~ labour would be needed.

To illustrate: education in primary and secondary schools could be vastly improved. The number of pupils assigned to teachers could be vastly reduced. Again, a cultural demand for beautiful cities as well as for adequate buildings would require the work of many more people than at present.

At¡ long last demands of a country for goods and services, and the kind of goods and services it requires, depend on its culture. Were America to be swept with a movement like that of the Renaissance in Italy, an entire new stratum of demand would be realized; its satisfaction would not only require more mechanical production but very many more jobs of one sort aqd another. Most of such demand apparently must be met through public expenditure. Little commercial profit can be made through improving education, or upgrading the quality of city planning, of urban renewal, or flanking private systems of television with non-profit systems devoted to education, music, first-rate drama.

Motivations have to be used beyond those drawn up for production and sale of conventional goods and services.

This is, at the moment, an issue actively discussed in intellectual and governmental circles, on which indeed political parties divide. Conserv~tives in the United States oppose greater entry of the State into economic life (except in the fielsl of national defence). Liberals believe that greater participation of the State will be essential.

Some liberals, perhaps unduly pessimistic, take a dim view of the American economy, believing it will not adequately meet human needs, and therefore will stagnate without solving the emerging problems, including a!ltomation and unemployment. I myself am not pessimistic.

American history does not lead to the conclusion that problems of this kind go unsolved very long. There is already in existence a growing body of analytic information. Soon there will be adequate studies of the causes and incidenc"es of poverty which should indicate the lines of attack on it. Other studies should indicate, in greater depth, the particular sectors of cultural development which should be undertaken.

Finally, it is increasingly becoming plain that a higher degree of integrated planning will be needed to avoid some of the wastes endemic in the existing system.

These do not, however, suggest that the American system is behind any other presently in existence, in any country of remotely comparable size. Dealing with a population of 192 milJion is more complicated than dealing with a population, say, of 7+ million as in SwedenSweden has done better by her population than the United States, but her problems are infinitely less. For comparison, we may take the Soviet Union. There communist civilization has been regnant for nearly half a century. That very great and very able country has yet to solve the underlying problem of production, without which she cannot confront the problem of giving her people free choice of life.

It is not unfair to say that the American social problem has already pushed into a phase only imagined as possibility by most other countries.

The Government of the United States is democratic. It responds to the' desires of its people.

When these desires are sufficiently acute, the governmental machinery moves towards satisfying them. The precise strength of the American economic system lies in the fact that it can provide the production, that is, the goods and the services, capable of satisfying any reasonable desire its population may express.

I state a final principle with conviction.

An economic system is not an end in itself.

It is a means to an end. The end is determined by the moral and cultural consensus of its people; economics merely provides the material base by which individuals and their society can move towards attainment of their moral and cultural ideals. The United States has no established religion or professes no agreed philosophy. Yet it has a high degree of consensus both on philo-, sophical principles and on social ideals. It has a political system enabling it to compel its economic system to provide an adequate base for growing realization of these principles.

By comparative standards, it has done well, if not brilliantly.

By. comparison with ideal possibilities, it has an infinite distance still to go.

The American economic system is capable of doing whatever the American people wish it to do. No other people has encountered so great an opportunity .â&#x20AC;˘

Designer of bridge considered both aesthetic and technical requirements in his plans. arch bridge, which he also designed; and the Mackinac Straits Bridge in Michigan, for which he was also a consultant.

Discussing the Verrazano bridge, his masterpiece, Mr. Ammann said: "The design of a bridge is largely determined by the conditions given-topography, geology, navigational requirements of the area." But within these limitations, he explained, the designer can still express himself. "In bridge building," he continued, "the aesthetics are quite as important as engineering details. It is a crime to build an ugly bridge."

In his Verrazano design, a single arched portal joins the towers' twin legs at the top, replacing the succession of crossbars or diagonal struts used to give other bridges rigidity.

Mr. Ammann envisaged the slightly tapered towers as having "ultimate simplicity of form and a clear expression of function."

And indeed they have just that.

The curve of the supporting cables is kept shallow, to heighten the sense of sweep. The depth of the stiffening trusses on the sides of the span is held close to the minimum required for the clearance of vehicles on the lower deck; this design avoids the heavy, bulky look of some suspension bridges.

As a final touch, Mr. Ammann insisted that the bridge be painted "the colour of atmosphere and water." It took 137,750 litres of special gray paint to give the bridge the desired cloak of anonymity.

"It is all a matter of aesthetics," said Mr. Ammalill in summing up his views on bridge design. "The problem is how far you can go in designing something that looks well, and is also technically correct."

Now that the Verrazano is completed, Mr. Ammann cautiously pronounces himself pleased with the result-while carefully adhering to the unwritten code of bridge builders against self-advertising. He allows little beyond, "it is an attractive bridge. It represents certain engineering advances."

To create this soaring structure, so graceful as to seem almost a work of nature, the bridge men first excavated thousands of tons of muck and sand on either side of the channel. Reaching a firm footing of glacial till-a mixture of sand, clay, gravel, small stones, and boulders left by an ice sheet that once covered the area-they sank two concrete caissons, each 70 metres long, 39 metres wide, and 50 and 30 metres respectively, in height.

After cleaning out the caissons, a concrete seal, or slab of concrete was placed in the bottom of each caisson and concrete slabs were placed on their tops. With the completed caissons solidly in place, the next step was to build on each of them two reinforced CMe ~t~ ~~d~ tAls \.J~ to a heIght or ten metres above high water. Then they capped each pedestal with a steel plate fifteen centimetres thick, on which the towers would rest.

Now it was time to erect the two-legged towers, put together from prefabricated hollow steel sections-sixteen tiers and 222 sections in each leg. Barges moved the sections-which averaged seventy-three tons-to the piers, and floating derricks hoisted them into place. Those forming the first tier were anchored to the pedestals by heavy bolts projecting up through the steel base plates.

The floating derricks could reach only high enough to set Temporary elevators carried workers to top of towers during construction of Verrazano-Narrows Bridge in New York Harbour.

three tiers in place. After that, "creeper derricks" took over the job. These ingenious contraptions were hauled up one side of each tower by engines at the bases, and temporarily bolted in place at each stage. Each creeper then hoisted up sections to build the next higher stage, and when this was finished the derrick moved up again on the new framework. Bolting teams of two men-using pneumatic wrenches-bolted the various sections together.

They tied the legs of the towers together with deep transverse stmts at the roadway level and the tops. And then they began to prepare the catwalks, unreeling steel ropes from big drums on barges and fastening them to anchorages at each end of the bridge behind the towers. In the river, they let the ropes sink to the bottom. On shore they built temporary trestles to raise them over roads. Several hours a day, while boats and cars kept out of the way, derricks hoisted the ropes to the tops of the towers, stretching in gentle arcs high above the river.

Then the bridge workers slid thirty-metre sections of heavy wire fencing down the ropes from the towers, hauling them together over midstream and clamping them together as catwalk floors. They also put up railings along the edges and began rigging "tramways" about four metres above the catwalks. These would later be all-important when the main cables were spun.

They were rigging tramways when Jim Bowers, steel inspector, led me aboard a launch that ferries bridge workers across the channel. A veteran of many bridge and shipyard jobs, Jim keeps an eye on material, and visitors, that go aloft.

As we chugged across the channel, I asked Jim about another launch that was cruising back and forth under the two catwalks. "It's there to pick up anybody who falls off," Continued on next page

Connecting New York City, right, with Statten Island, bridge was designed by Othmar H. Ammann, 85, above, veteran bridge builder.

Some 600 men worked 15 hours a day for seven months to spin cables for bridge. he explained. "Of course, it wouldn't do the guy much good because even in the centres those catwalks are about ninetyfive metres above the river."

So far nobody had fallen off. Still, I looked with new interest at the catwalks and at the dizzy towers which held them up. I've been frightened of heights all my life. Moreover, I have an impulse to jump from lofty places. Perhaps I was being over-curious about this bridge.

J felt this even more strongly when I saw the temporary elevator that was to raise us to the top of the Staten Island tower. Instead of running up and down inside the tower on a steel frame as its permanent successor would do, it was out in the open. Fashioned mainly of wire netting, it reminded me of a bird cage. As the door crashed shut behind us I thought of a foolish parrot that had talked himself into a jam.

The cage sprang into the air and bounced gently up and down as if suspended from a rubber band. It began to rise swiftly, and finally stopped beside a wooden platform at what was then the top of the tower. Later they would add ten metres of housing to enclose the cable saddles. But now the top was a two-storey wooden falsework where a derrick, driven by a diesel engine, was hauling up material. When we"got out of the cage we climbed up an iron ladder to the second storey.

There Jim showed me one of the smoothly furrowed cast steel "saddles" where the wires of a main cable would later rest.

Most of the men on the tower, he explained, were working on the tramway system.

The sand on South Beach, Staten Island, glistened like gold in the afternoon sun. The ships off Quarantine, just to the north, swung like toys at their anchorages. The view was superb. Still, it would be pleasant to get again on solid ground.

"Want to go down the catwalk?" Jim asked. "Sure," I heard myself saying. Then I looked down. It swooped towards the middle of the river with a slope like a toboggan slide and then zoomed to the top of the other tower. I remembered that both towers, though still slightly short of their ultimate height, were taller than sixty-storey buildings.

Our catwalk was six metres wide. You could look right through the big meshes of the wire floor, and see the little boats down there on the water. The whole thing undulated Underfull moon, lights outline majestic curve of supporting cables on new bridge which spans New York Harbour.

gently at every step. For the first thirty metres or so I just put one foot ahead of the other. Finally, when I was able to breathe and look around a bit more, I saw that there was another catwalk about twenty-five metres north of us, connected to ours at various points by narrow walkways.

Men were at work on both catwalks. Some were installing the tramway system. Others were fixing electric cables for lights and control switches. One of the men was Joe Mayo who for twenty-three years has been working on bridges and skyscrapers-as his father and grandfather did before him.

Joe is a Mohawk Red Indian, one of a band whose original members were first trained in high iron in 1887 when a contractor built a railway across the St. Lawrence River near Montreal. (See story in SPAN,September 1963). Joe's grandfather worked on that bridge and so did a dozen additional Mohawks. Later some other Mohawks took up the trade.

Now several thousand Red Indians are members of the International Association of Bridge, Structural and Ornamental Iron Workers (AFL-CIO). Many of them live in Brooklyn.

"Heights don't bother us," Joe explained as he worked on the tramway system. "Why? How the hell should I know? But they don't, and the pay is good and my four boys will probably be ironworkers too."

The pay is $5.40 an hour, which means that a pretty good high ironworker can earn $12,000 a year, and a highly skilled one-with overtime-U8,000. This is more than most engineers get, but the ironworkers feel they earn it. Even if they don't fear heights the heights are always waiting for them if they get careless, despite elaborate safety precautions.

"You've got to respect this job," another catwalk worker said. "You can get hurt or you can hurt somebody else. Of course, these plastic helmets we wear prevent a lot of headaches. When you're working on the catwalk you can knock your head on the wire all day and never give it a thought.

From the low point over mid-channel we began the climb to the Brooklyn tower. Every few yards we passed men who were working on the tramway system or hauling electric cables. The Brooklyn shore slanted crazily as we trudged up the slope, but these bridge men worked with an irritating unconcern for their surroundings.

Finally, we reached the tower. I thought we would go down in the elevator. But Jim wanted to show me another saddle, and some of the other tower fittings. He also wanted to give me a little more information on the bridge. So we went out on a little wooden structure projecting from the tower.

When the four cables were spun and the roadway built, Jim explained, the weight of all that metal and paving would pull the cables down five metres at midstream. It also would pull the tops of the towers out of plumb and towards the river. This

WHAT THE BOOKS DON'T TEACH

As THE ACADEMIC YEAR grinds towards the fateful climax of final examinations, students at Northwestern University in Evanston, Ill., near Chicago, break the tension and revive their spirits in a great gala of plays, dances, sports and contests. The week-long event is the "final exam" of that whole segment of college education called "extra curricular activities," which in themselves comprise a taxing demi-curriculum. Ranging from a lecture on gas dynamics by a world-famous physicist to an impromptu twist session on a campus street; from a highly polished production of Pelleas and Melisande (below) to a college tennis championship, these colourful activities devour vast amounts of student time and energy. Too much? This is a question which each college debates, and settles in its own way.

But uncontested is the fact that these activities are vital to education and a great safety-valve for exuberant young spirits.

In a society that depends upon individual initiative and independence of thought, these student-ruled activities are an important preparation for the maturer years which follow.

6ala tinale of college year spari.les with tale"t~ breaks pre-exam tension at Nortl,western lJ Iliversity.

New Sig/lts and sounds make spirits soar.

For da,.edevils~ art lovers~jazz f,I,IlSa ulliversity comes alive.

KEEPING TRACK OF THE ASTRONAUTS International co-operation has enabled the U.S. National Aeronautics and Space Administration to set up a world-wide network of tracking stations to support orbital flights, and has been an importan{ element in the spectacular successes achieved in recent years.

THE FIRST man-made s.atellites were launched seven years ago, spectacular advances have been made in space exploration and navigation. The recent three-orbit flight of U.s. astronauts Virgil Grissom and John Young, which followed a number of successful one-man flights, was hailed as a significant step forward in the phased American programme of "exploring space for the service of peace and the benefit of all mankind." The astronauts flew in the world's first manoeuvrable manned spacecraft and made space history by changing precisely the path of their orbit during flight.

These outstanding achievements are the product not only of continued, painstaking research and improvements in technology but of a gigantic team effort

S

INeE

in which, besides American scientists and astronauts, a large number of technicians and other personnel in many countries of the world are participating.

International co-operation has enabled the U.S. National Aeronautics and Space Administration (NASA) to establish and activate a world-wide network of space vehicle and satellite tracking stations.

A vital part of this system, and one which supports the most critical of all flights, is the Manned Space Flight network spanning three continents and three oceans and interconnected by global communications. It comprises sixteen fixed ground stations in various countries and two instrumented ships which are assigned to particular locations from time to time depending on the requirements of the flight.

The Manned Space Flight network is specially equipped to provide continuous ground contact, monitoring and communication with the spacecraft from the moment it is launched and until it is landed. On the continuity and effectiveness of this contact may depend the safety of the astronaut.

Since in space flights, with their tre. mendous speeds, the time element is of vital importance, tracking assumes a highly significant role from the instant the space vehicle is lifted off the launching pad. The first decision which the experts in control of the mission at Cape Kennedy, Florida, have to make is whether a satisfactory orbit is possible and the flight should continue or whether it should be aborted and the spacecraft brought down as quickly as possible. To Continued on next page

Vast, integrated system of global communications make this decision they have to be provided with exact information regarding the spacecraft's acceleration. speed and direction. The relevant radar data is carried by high-speed lines from Cape Kennedy in Florida to the Goddard Space Flight Centre at Greenbelt, Maryland, where instantaneous computer calculations are made and the answers carried back to the plot boards at the Manned Space Flight Control Centre at the Cape. A digital data code is used and the whole operation is carried out with such rapidity that the graphs on the plot boards are only a few thousandths of a second behind the actual position of the spacecraft. The boards also indicate at all times the continually changing and predicted impact point of the capsule.

In the meantime, however, the rocketpropelled capsule may have travelled beyond Cape Kennedy's radar range, in which case the decision is made by the

IS

vital to flight success and safety.

Flight Controllers at Bermuda, the spacecraft's next point of contact with ground control. Bermuda has its own radar and other facilities and is also in voice contact with the Flight Control Centre at the Cape. Less than a minute is available for the final decision since, if the orbit is not correct or the flight has to be abandoned for any other reason, the retro-rockets must be fired while the spacecraft is still over Bermuda. Even a few seconds' delay might mean that the capsule would land deep in the heart of Africa.

When the capsule is in orbit, the various tracking stations which are geographically so situated that the spacecraft is in almost continuous radio contact with the ground, must act quickly to keep track of the vehicle. They are guided by the computer messages received by teletype from the Goddard Centre, which analyses the radar data and determines the exact future position of the spacecraft ten,

fifteen, or any given number of minutes later. The station crew th us know where to point their tracking antennas and at what time they may expect to locate the capsule.

As soon as the orbiting spacecraft comes within the tracking station's radio range, the station records its location and checks the astronaut's physical well-being by voice and telemetry communication.

Telemetry is the remote measurement of events and conditions ranging from an astronaut's blood pressure to scientific information regarding the strength of the lunar gravitational field. The spacecraft has instruments called sensors which react to an event and the reaction, transformed into coded electric signals, is transmitted to the ground where immediate, appropriate measures are taken.

Tracking stations are also equipped with ground transmitters to send coded "command" signals to the space vehicle

and convey such essential instructions as firing of a retro-rocket in an emergency.

The tracking, telemetry and other data collected by ground stations is immediately relayed by voice and teletype circuits to the Flight Control Centre which has thus at all times a full record of the progress and status of the flight.

This enables the Centre to be in readiness at any moment to take whatever action is necessary to ensure the safety of the astronaut. When the space vehicle is in the final orbit, during re-entry, the Centre makes and transmits computer calculations of the flight path and the predicted area of impact every half-second until the capsule has landed.

The vast, integrated system of communications linking Goddard and the Flight Control Centre at Cape Kennedy with a network of global tracking stations is thus vital to the success of manned flights and the safety of the dauntl~ss pioneers of the space age. The system covers about 177,000 circuit miles, of which 102,000 are teletype, 60,000 miles are telephone, and the remaining 15,000 miles high-speed data circuits. The effectiveness and comprehensive scope of this

system'may be gauged from the fact that during manned flights in some cases information from tracking and ground instrumentation points has flowed into the Goddard Space Centre at the rate of more than 1,000 bits per second!

Commenting on the importance of communications and tracking stations to the success of space missions, astronaut Walter Schirra (who orbited the earth six times in a Mercury capsule in October 1962) says: "There were several times when the communications network relayed messages that marked the high points of the flight for me. The first time came just after the sustainer cut-off when the Cape spacecraft communicator informed me that I had a seven-orbit capability ....

The second milestone of the flight came with the go-ahead for the fourth orbit. It was again a situation where the supporting role of the network and the computers played an important part in getting a fast decision ....

The third outstanding feature of the mission was the re-entry that brought me down within sight of the aircraft carrier assigned to pick me up."

In contrast to manned flights, which are

currently measured in terms of a few hours, unmanned earth satellites remain in orbit for many days, months and even years. In their case no minute-by-minute tracking or recording is necessary and a "sampling" system is practical and convenient. What is known as the Minitrack system was developed and first used for this purpose to track Explorer I, the first U.S. earth satellite launched in January 1958. Since then the system has been constantly improved and expanded, and today the Minitrack network comprises thirteen stations throughout the world, the locations of which are so chosen that at least one station is within line of sight of a satellite during almost every orbit.

A Minitrack station has no radar equipment and does not radiate any energy. but is fitted with a receiving antenna whose reception pattern forms a narrow "fan."

When the satellite passes through this "fan," its signal is heard and recorded and a note made of the time and other appropriate information. The relevant data, punched in digital form on paper tape, is then transmitted by teletype to the Goddard Centre where reports from various stations are co-ordinated for Continued on next page

Astronauts Young (foreground) and Grissom seen through open hatch of spacecrajf before launch.

computation of the satellite's position.

Yet another system which keeps track of unmanned satellites and helps with the collection and co-ordination of data relating to these flights, is the world-wide Optical Tracking Network set up by the Smithsonian Astrophysical Observatory (SAO), of Cambridge, Massachusetts, in co-operation with local governments.

There are twelve Optical Tracking stations including one in India at Naini Tal operated by the Uttar Pradesh State Observatory. The equipment for the Naini Tal station was provided by the Smithsonian Observatory and consists of a higWy specialized 30-20 inch BakerNunn Satellite Tracking Camera, a quartz clock, power accessories, ancillary equipment and maintenance materials. The camera has a 3-axis mount, which enables

it to be pointed in any direction, and takes a photograph of the satellite against a known star background. The exposed film is processed and carefully studied by experts at the station and the determined position of the satellite and other data are cabled to SAO, followed by despatch of the film by air. Experience so far has shown that the work of the Optical Tracking stations has been particularly valuable in determining initial trajectories of satellites and space probes and for providing precise information on air density and geodetic measurements.

Apart from the global networks of space tracking stations just described, there are several other individual projects which contribute to the international effort to increase. man's knowledge of the universe for betterment of- the human

condition. An Indian example is the telemetry station at Ahmedabad which was set up in 1961 with equipment supplied by NASA. It is a mobile station with its own power unit, a highly directional antenna which can be automatically moved to point at a passing satellite, and a very sensitive radio receiver. (For a fuller story on the operation of the Naini Tal and Ahmedabad stations, see SPAN,August 1962).

Speaking at the White House ceremony to honour astronauts Grissom and Young, President Johnson said: "Man's role in space will be great, vital and useful."

International collaboration will doubtless hasten the advent of the day when man can reap the rewards of his heroic, ever-widening probe into the mysteries of space. â&#x20AC;˘

A man of great moral courage, General Robert E. Lee was calm and dignified in disaster. After his surrender to Union forces in April 1865, he went into seclusion.

But the South still looked to him for leadership.

PORTRAIT FROM HISTORY: ROBERT E. LEE

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HE ORDEAL IN Wilmer McLean's parlour took place on April 9, but Robert E. Lee remained near Appomattox for another three days, until his men stacked their arms and surrendered the worn, faded battle flags which they had followed for four years. Then he set out towards Richmond, pitching his tent each night, sleeping under canvas for the last time. News of his coming preceded him, and along the road women and children waited, some with gifts of food.

On the morning of April 15, 1865, at almost the same time that Abraham Lincoln was dying in Washington, Lee reached the town of Manchester on the outskirts of Richmond.

William Hatcher, a Baptist minister, looking out his window at the gray, sodden landscape, saw Lee's party ride by in the heavy downpour. "His steed was bespattered with mud," Hatcher wrote, "and his head hung down as if worn by long travelling. The horseman himself sat his horse like a master; his face was ridged with self-respecting grief; his garments were worn in the service and stained with travel; his hat was slouched and spattered with mud .... " The rain was still falling when Lee and five other officers, with Lee's old ambulance and a few wagons carrying their personal effects (one, lacking canvas, was covered with an old quilt) rode into Richmond. and the first people who saw them enter the ruined city wept. As they went along, crowds grew thicker, cheers broke out, and Union troops uncovered when the General passed by. Finally he reached the house on East Franklin Street, dismounted, and made his way towards the gate through a cheering throng, occasionally grasping an outstretched hand. Then he bowed, went into the house, and closed the door on four years of war.

Worn out, heartbroken, deeply concerned for the future of the South and its people, Lee stayed in the house for days on end, sitting quietly in the back parlour with his family, sleeping the sleep of exhaustion. In those first weeks after Appomattox, Union troops patrolled the streets of the city outside his door; dazed civilians depended for food on handouts from Federal relief agencies. No trains entered the ghostly city; there was no mail. Yet everyone waited for news, mostly to learn the fate of captured troops or of the army still fighting under Joe Johnston. Nearly fifty thousand Negroes had come in from the outlying plantations, but no one seemed to know what to do with them, or they with themselves. After Lincoln's assassination former Confederate soldiers were forbidden to talk to each other in the streets, and between ten and fifteen

Mr. Ketchum's article is reprinted with permission/rom American Heritage. Š 1961 by American Heritage Publishing Co.. 1nc.

thousand of them roamed the city, silent, sullen, many of them crippled. At night the desolate city was in darkness, for fire had destroyed the gas mains. There was no light, and there seemed to be no hope.

If Lee had thought to shut out the city and the past he was mistaken, for the South still looked to him for leadership, despite the Union sentinel in front of his house. A stream of callers began to arrive: women seeking husbands and sons, ministers and civic leaders seeking advice, the curious seeking souvenirs or a glimpse of the great man. Confederates still in Libby Prison wrote, asking him to arrange their release, or if that was impossible, just to "ride by the Libby, and let us see you and give you a good cheer. We will all feel better after it."

Officers and men came by to bid their old chief farewell before they headed for home. One day two ragged soldiers appeared, saying they were delegates for sixty more whose uniforn1s were too tattered for them to enter the house. On another occasion, when Lee was trying to answer the flood of correspondence, a tall Confederate soldier with one arm in a sling came to the door and was turned away with an apology by Custis Lee, the General's son. As he turned to go, the soldier said he had been with Hood's Texans and had followed Lee for four years, and now he was going to walk home to Texas; he had hoped to shake his commander's hand. Custis changed his mind and went to get his father, and when Lee came downstairs the s-oldier took his hand, struggled to say something, and then burst into tears.

He covered his face with his arm and walked out of the house.

Thousands who could not see him in the flesh wanted a picture, and one day in April Mathew Brady, the photographer, came to the front door and told a servant he wanted to see the General. When Lee appeared and heard the request he said, "It is utterly impossible, Mr. Brady. How can I sit for a photograph with the eyes of the world upon me as they are today?"

But Brady, who had suffered physical and financial hardships and risked danger on a score of battlefields in his determination to document the Civil War, knew this was one picture that had to be taken. It ended the story.

He went to Mrs. Lee and to one of Lee's friends, and they persuaded the General to sit for him. Once more Lee put on the gray uniform, came out into the sunlight below the back porch, and spoke wearily to the photographer: "Very well, Mr. Brady, we are ready." And the photographer with the failing eyesight put his head under the black cloth, focusing the camera until he thought he could see the image sharp.

His subject, the commander in chief of the defeated Confederate Army, stood motionless, perfectly controlled except for the pride and defiance written in his eyes. â&#x20AC;˘

On the banks of the Charles River, Mass ..

Boston Symphony Orchestra gives an open air summer night concert.

Summer music festivals present concerts of classical and contemporary music all over the United States.

SUMMERTIME IS MUSIC TIME

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N THEUNITEDSTATESgood music is no longer "a sometime thing" largely confined to concert halls and opera houses during the winter. In the hot summer months it simply goes outdoors or to the country.

Today in all regions of the nation, even in the new State of Alaska, there are summer festivals-of classical and contemporary music. folk music, opera, jazz and dance. Music schools and music camps also add their strings and voices te this summer serenade by regularly presenting concerts for the public. Like the festivals, they have grown in number and scope in the United States during the last quarter century.

Since many leading directors, conductors, composers and performers mix their artistry with the skills of talented young people in these summertime activities of the American music world, the quality of this music compares not unfavourably with that of the winter season.

No wonder, then. that wherever such fare is offered throngs come to listen and watch. In fact, for many, music takes on a new and delightful dimension when it is heard in a forest glen or an orchard, a closed tent on a mountain-top or a big open amphitheatre, or the garden of a museum or a zoo.

Some typical summertime music scenes in the United States are shown in the accompanying photographs.

A growing number of music schools and camps add their strings and voices to each summer festival.

Choral conductor Hugh Ross, background, offamed Berkshire Festival group, watches a rehearsal at Tanglewood, Massachusetts.

Berkshire Music Centre students, above, rehearse at Tanglewood, Mass. Here eminent musicians teach Iheir specialilies.

Left, crowds gather for a chamber music concert at Tanglewood Festival in Lenox, Mass. Eliel Saarinen designed the hall.

Rudolf Serkin, below centre, is artistic direclOr, Mar/bora Music School specializing in piano, vocal and chamber music.