 It's time for the Lone Gene Chronoscope, a television journal of the important issues of the hour, brought to you every Monday, Wednesday, and Friday. A presentation of the Lone Gene Wittner Watch Company, maker of Lone Gene, the world's most honored watch, and Wittner, distinguished companion to the world-honored Lone Gene. Good evening, this is Frank Knight. May I introduce our co-editors for this edition of the Lone Gene Chronoscope? Larry Lusser from the CBS television news staff, and Kenneth Crawford, National Affairs Editor of Newsweek Magazine. Our distinguished guest for this evening is Paul G. Hoffman, Chairman of the Board of the Studebaker Corporation. Mr. Hoffman, as the first head of the Marshall Plan, you know all about the economy of Europe, but of course now you're in the automobile business. And a lot of economists are saying that the automobile business is so important to America that any recession in it could affect the entire economy. Now, is this an accurate estimation of the situation? Yes, I think that if there's any real recession in the automobile business, that that would affect the entire economy. I happen to think the business is a wonderful business, and if we're willing to take the 10-year look, I can tell you that in the next 10 years, I'm very sure the industry will sell not less than 60 million cars and trucks, maybe more. But suppose we looked at the automobile business today, just what is the situation now, Mr. Hoffman? Well, automobile business is fairly good. It could be much better. There is no reason why the business shouldn't be very good this year. But as you know, we're in an economy, this American economy in which about 50% of the goods purchased in any normal year are of a character that the purchase can be postponed. And among those goods are automobiles. In other words, people not only have to have the money to buy new automobiles, new houses, new television sets, but they also have to have the... They also have to make up their minds. They're going to buy it now. So you have that additional factor to contend with, and it's pretty difficult to always put the calipers on a person's mind and find out what they will do. Mr. Hoffman, in this connection, I think you said that fear which has nothing to do with the pocketbook is a factor in this kind of situation. Political fears, all kinds of fears. It seems to me that maybe the President said about the same thing at his press conference today. Yes, I think that's very true. I think the President was speaking very wisely when he called our attention to that. I remember, for example, years ago in South Bend, there was a great battle going on between the Ku Klux Klan and those who were opposed to it. And while that conflict was on, nobody was buying new homes or new automobiles or anything but just groceries. In other words, fear and distrust and lack of confidence do have a very definite effect on business. In other words, fear is bad for business, and the kind of fear we're seeing in some quarters now is definitely bad for business. I think any kind of fear and perhaps fears that aren't well-grounded are the most devastating kind of fears. Mr. Hoffman, how important do you rate tax relief as a factor in this economic situation? Well, as an individual taxpayer, I certainly would say that any reduction in taxes would be most welcome. And any money I can save in taxes or any lowering of the taxes will give me that much more money to spend. Of course, tax relief is important. There's an argument going on now about kinds of tax relief. I wonder if you would like to say anything about that. Well, this is a political argument. I understand. And adequately to discuss taxes, you'd have to give me much more time than you will. I think this generalization would be an order that you do want tax relief that will stimulate business. That is important. I can't go into too much detail, but I can assure you that there are certain measures that are proposed in this new tax bill that will help business. And that means that we can put more people back to work. It seems to me the most pressing problem is to put people back to work. Let me illustrate just one condition. This matter of more rapid allowances for depreciation on buildings. If a business is doing well and can write off the cost that billing over five years or six or seven or eight years, they might go ahead with the building. Because they can see the money in sight and they can see the opportunity to pay for that building. But if they are restricted to a four-year write-off, they might decide there's no special reason for doing it. In other words, I think at no real cost there can be a great stimulation of buildings in four factories if that relief is extended. Mr. Hoffman, there seems to be a difference between the Republican and Democratic thinking on this subject. The Republicans, I gather, think that anything that helps business will in turn create employment. And the Democrats seem to feel that anything that helps the consumer will in turn create employment by increasing purchasing power. They're both right. In other words, any increase in purchasing power will certainly help. I think you've got to decide, as to whether, for example, a tax relief and an extent of $2 billion that might come which would offer an opportunity. This is the matter of exemptions. That would offer people an opportunity if that money was left with them to spend that $2 billion. There's no assurance they would spend it. If we left with them, one of the problems at the moment is the fact that our savings are, I believe, one of the highest rates in history. In other words, the banks are bulging with money and more and more money is pouring into banks because people are a little concerned about the present and the future and they aren't spending normally. Well, isn't it true that you're also doing things to cut your costs to production, increase your profits? And I'm referring now to automatic machinery. A lot of automobile manufacturers are putting in automatic machinery. Now isn't this going to affect employment and labor relations? Yes. Of course, that's a process that's been going on for ever since industry started. In other words, since the very first days of mechanization, probably the most interesting statistic I know is that at around 1900, every industrial worker had about three-quarters of a horsepower behind him. He had that horsepower behind his muscle power. Today he has eight horsepower and he also has automatic machinery that's marvelous. Now all this added horsepower and this automatic machinery enables us to turn out more goods per man hour of labor and that enables us to raise wages and that enables us to increase purchasing power. Doesn't this get you into trouble with the unions, Mr. Hoffman? I think the American unions have taken a very enlightened attitude toward this matter of mechanization because they have learned by experience that if they can produce twice as much, they have a chance to get much more in wages than if they're producing at the lower rate. Mr. Hoffman, the unions seem to be screaming now that the administration should do something to alleviate the effects of unemployment. And do you think that the recession is actually deepening in this country? Well, we certainly have too much unemployment. I mean, any time people are walking around that want to work and can't find jobs, you have too much unemployment. I think everyone recognizes that it's a serious situation. I think that really feel that if we can just get or have return of normal buying, that we'll get these people back to work. And I said I'm repeating myself when I say certain of the proposals in the new tax bill, I think, will result in putting people back to work. Mr. Hoffman, you're something of an expert in the foreign field. What's the outlook for foreign trade in all this? Well, the amount of trade we do with foreign countries depends entirely on how many dollars they have to spend. In other words, there's no problem selling goods abroad. There is a problem getting paid for goods. And the more imports we take in this country, and therefore the more dollars we send out, the more goods we can export. Well, are you actually afraid of the competition of cheap foreign cars in this country, Mr. Hoffman? No. The automobile business has never asked for any protection. It shouldn't because we have advantages due to the fact that we have a very large market here, and we can mass produce, and therefore we have those advantages. But the record's clear we've never asked for any tariff protection. I'd like to ask you a personal question, Mr. Hoffman. When are you automobile manufacturers going to make your cars less tinny and give us cars with some steel in them so they don't collapse the first time they're dented in traffic? Well, Mr. Lusser, it's perfectly obvious you don't own a Citroënter automobile. That's all I can say. Well, may I ask you, sir, when you were head of, of course, of the European Cooperation Authority, and you knew a great deal about Europe's economy, I wanted about this phrase that when America sneezes economically, Europe gets pneumonia. Do you think this is going to affect Europe financially this recession? Not exaggeration, but any time the American economy goes on, the European economy is affected. I don't think the sneeze would produce pneumonia, but it might produce a sort of, sort of a serious cold. The European economy is doing quite well, isn't it? The European economy is doing very well indeed. I don't think that people are aware of the really spectacular progress made by the Europeans after the end of the war. In other words, in less than three years' time, they increased their production of industrial goods over 50%. Mr. Hoffman, may I ask you as a final question? What do you think will hasten the return of stability to our economy here in this country? Well, I think we've got to learn not to be afraid of peace. In other words, for the first time, peace is uneasy, but we have uneasy peace. And strangely enough, that's caused some concern. Now, if we'll just accept the fact that peace is really a wonderful thing, we ought to be rejoicing it and start acting the normal way, spending our money normally if we have it to spend and need the goods. I think there'll be a very quick return to normality in America, and that means a very prosperous America. Thank you very much, Mr. Hoffman. It's a great pleasure to have you here tonight. The opinions that you've heard our speakers express tonight have been entirely their own. The editorial board for this edition of the Laun Jean Chronoscope was Larry LeSœur and Kenneth Crawford. Our distinguished guest was Paul G. Hoffman, chairman of the board of the Studebaker Corporation. There must be many good reasons why in all the countries of the free world, the watch of highest prestige and reputation is Laun Jean, the world's most honored watch. And there are many good reasons. Only Laun Jean among the finest watches of the world has won ten World Fair Grand Prizes, twenty-eight gold medals, highest honors for accuracy in observatory competition, a position of leadership in sports, aviation, and in science. Now, in these magnificent Laun Jean watches of today, discriminating men and women may find all the qualities which they seek in a fine watch. Superb appearance, thoughtless performance, unique prestige, and reputation. And may I suggest that if you wish to buy for yourself or as an important gift, just about the finest watch made anywhere in all the world, your choice might well be Laun Jean, the world's most honored watch. And remember that if you pay seventy-one fifty or more for a watch, you're paying the price of a Laun Jean. Why not insist on getting a Laun Jean, the world's most honored watch, the world's most honored gift. Premier product of the Laun Jean Witner Watch Company, since 1866, maker of watches of the highest character. This is Frank Knight reminding you that Laun Jean and Witner watches are sold in service from coast to coast by more than four thousand leading jewelers who proudly display this emblem. Agency for Laun Jean Witner watches. 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