State of Business: Warmth of Spring

U.S. businessmen had rarely basked in a warmer glow. As it reached the 39th month of economic advance, the U.S. economy was in the midst of the longest peacetime expansion in modern history. First-quarter profit reports from every part of the U.S. showed that corporations were earning on the average of 20% more this year than in 1963. General Motors' earnings of $536 million were the highest for any company in any three-month period in business history, and huge profit gains were reported by giants as varied as Eastman Kodak (up 25%), U.S. Steel (up 72%) and the Monsanto Co. (up 84%). Retail sales marched upward, and so did construction contracts. Auto and steel production continued at record or near-record levels.

New Attitude. Above and beyond all this spring growth was the warm breeze from Washington. The President of the U.S. went before the annual meeting of the U.S. Chamber of Commerce (see THE NATION) and spent a chatty hour appealing for an end to suspicion and distrust between Government and business. After the speech, Harvey Aluminum President Lawrence Harvey said: "This signals a new attitude on the part of bureaucrats—business is your friend, work with it." Businessmen believe that Johnson thinks the way they think, point out that he is the first President since Herbert Hoover to have had successful business experience. Says Boston's Eli Goldston, president of Eastern Gas & Fuel Associates: "He's a good model of today's professional business manager."

To many businessmen, one good example of professionalism was Johnson's success in settling the long and complicated railroad labor hassle—and doing so without visibly bruising anyone. About 5,000 railroad firemen stand to lose their jobs immediately under terms of the Compulsory Arbitration law, whose constitutionality was upheld last week by the U.S. Supreme Court, but most will get severance checks or other railroad jobs. Labor chiefs applauded Johnson's concern for the displaced workers, and businessmen generally agreed that he had not overstepped the bounds of collective bargaining by persuasively pushing the settlement. Says Santa Fe President Ernest A. Marsh:

"He and his mediators deserve a lot of credit for doing something that nobody else had been able to do."

An Accountant's Memory. The President has an accountant's memory for economic statistics, and he delights in exploiting the bullish ones in his speeches in a way that puts them onto Page One almost every day. In his speech to the Chamber of Commerce, he managed to mention 50 different statistics. Armed with figures on profits and take-home pay, Johnson has been using every possible chance to campaign against price and wage rises—gently warning businessmen that if inflation comes to eat away prosperity, they will have only themselves to blame.