When natural law was permitted to function according to principle, corrective forces maintained a degree of equilibrium. To each action there was an opposite and equal reaction and the action contained the germ of the reaction, to the end that the pendulum could not swing too far. It was only when man-made law began hampering natural law that the violent swings took place. No man could understand the workings of the natural law well enough to anticipate the future nor, were he able to do so, could he control the future. Least of all did he have wisdom enough to incorporate the germ of a corrective action in his plans.
As I studied this matter of profit and business cycles, I began to get hold of a truth that seemed to be the answer to a lot of questions about the place of the machine in the economy. Men were beginning to argue that labor-saving machinery would bring about technological unemployment, and as the world-wide depression deepened, the facts seemed to confirm the opinion. However, there was another side to this coin: in a technological age when some engineers were engrossed with the task of cutting costs with machinery, other engineers were busy creating new devices to sell. And when these new devices clicked, they called for the creation of new enterprises, the employment of new money—even the creation of new wealth—and best of all the creation of new jobs for workmen. The automotive industry was one of many brilliant examples of this fact.
Now no man or group of men could possibly have enough wisdom to control the operations of this law. The free play of natural forces was the only intelligent controller. Like the slipstream of an airplane, this process might appear to be turbulent and wasteful, but again, like the slipstream, it was one of the most efficient processes in nature. The best men could do was try to maintain a healthy climate in which the process could flourish, and since the key lay in the incentive for the human spirit, men’s chief contribution must come out of faith in the natural process.
All this was a revelation to me in more ways than one. Like most naval officers I had absorbed something of the point of view of the professional man who tends to look down his nose at the tradesman. Overimpressed by the sins of a few profiteers, we considered businessmen mere money grubbers inclined to wink at sharp practices, if not downright dishonesty. To the professional man, especially one in public service, whose compensation does not clearly reflect the results of his own efforts, the real reward lies in his knowledge of a job well done. To some, this provides all the incentive required, but to most it furnishes an excuse to sit on the beach and watch the ebb and flow of the tides. The military man is prone to forget that some hard worker must create the wealth necessary to support him in the honorable estate to which he has become accustomed and that if comparable salaries make his appear modest, Uncle Sam is lavish with the perquisites.
When I sought to probe these matters with J. F. McCarthy, I found a kindred spirit. From the inception of the company, Fred Rentschler had brought Mac into every business discussion and decision; it had been his idea that finance should walk hand in hand with operations rather than bring up the rear with a truck load of old ledgers. He had, therefore, given Mac a high degree of autonomy in financial matters especially in the subsidiaries and Mac had used this so skillfully that everyone in the organization respected his business judgment and admired his integrity.
As time passed, and my responsibilities in United widened, Mac and I expanded our viewpoints together. Shortly after completing the physical consolidation at Pittsburgh, I was made president of the Sikorsky company at Bridgeport. A year later, after Chance Vought had died suddenly, I became head of his company in East Hartford. In less than a year, I, the least experienced businessman in United had fallen heir to its three problem children. As the depression deepened, and vast social changes began to take place, I sensed the far-reaching responsibilities that attach to the head of a manufacturing organization. Aside from the normal headaches incident to managing a competitive enterprise during a period of world-wide depression, there were heavy responsibilities imposed by strange forces unleashed by politicians prying open Pandora’s Box. This was an era when American business was placed on trial for its very life.
Our difficulty at Pittsburgh sprang primarily from the fact that the consolidation of the two manufacturers of metal propellers had created a potential monopoly; and there is no business more vulnerable than a monopoly. Our two steady customers, the Army and the Navy, wasted no time in slapping us down; they turned their propeller business over to fly-by-night competitors, and worse still, to government arsenals. My first venture in business was now threatened by unfair competition from sources that contributed nothing to engineering and development and charged their overhead to a government appropriation.
It was somewhat as if Uncle Sam had pirated a manuscript of a best seller and had had it printed in the Government Printing Office or a sweat shop at public expense, and then left the author to starve. The policy is hardly designed to advance the writing art and, in the long run, is sure to prove bad medicine for the government, that is the people, itself.
This fact we endeavored to point out to both Army and Navy, urging that it was to their interest that we continue to live. After all, we were the only organization in the world capable of continuing the development of metal propellers; foreign aircraft still clung to their archaic wooden props, and foreigners were still convinced of their superiority. We tried to point out that the consolidation had been forced by patent considerations and for no other reason, that the new management had been drawn from Army and Navy and had no intention of monopolizing anything but was determined to foster progress in new design. Their reply was to ask to see the color of our new designs.
With survival dependent upon the creation of something new and better, I went upstairs to the engineering department to put the problem before its chief, Frank Caldwell. Frank, a big cinnamon bear of a fellow with a slow Tennessee drawl, had forgotten more about aircraft propellers than most engineers would ever know. While Chief of the Army Propeller Branch at Dayton, he had suggested to Harry Kraeling, then a salesman of the steel alloy Vanadium, that he give up trying to build propeller blades out of welded-steel sheets, and use instead the new aluminum alloy, duralumin. When I put the problem up to Frank, he hoisted his bulk out of his chair and ambled toward a drawing table in the corner of his office. Pushing aside a T square, he peeled the cover back from a large drawing and looked at the black lines with modest pride.