Full text of Business Review (Federal Reserve Bank of Philadelphia) : December 1958

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health isn’ t free
a new capital pipeline for
small business
christmas buying looks good

HEALTH

IS N ’T FREE

When you first become vaguely conscious of a

You are not expected to tip the nurse who con

feeling of discomfort somewhere in the equa

ducts you to your room. She tells you to get

torial region you are inclined to ignore it. If the

undressed, go to bed, and promptly disappears.

discomfort degenerates into a nuisance or a pain

Apprehensively, you await the surgeon with his

that aspirin tablets no longer dispel, you reluc

kit of tools, but nothing happens. Just about the

tantly consult a doctor. After a professional pum-

time you conclude that you have been forgotten,

meling and poking, the doctor finds the cause of

a succession of nurses appears— one to lead you

your trouble. It has a Latin name, and requires

to the scale for a weighing, another to take your

immediate surgery says the doctor with profound

temperature and pulse, another to take your blood

gravity. Your face betrays even greater gravity

pressure, and the needle nurse to get samples of

as you exclaim, “ An operation!” And so, for the

your blood.

first time in your life, you enter a hospital carry
ing a valise instead of a bouquet.

On going to a hospital

After another long period of apparent neglect,
comes a squad of nurses with a rig that looks
like a portable filling station after it is assembled.
Your hunch was right. The juice flowing by little

On checking in at the hospital, there is a long

drops into your blood stream is glucose and

questionnaire to be filled out. Cavalierly, you

saline— an energy reinforcement and a shock ab

answer all the questions— just a matter of rou

sorber. About the time you are fueled up, the

tine— except the one about who is your next
of kin.

surgeon makes his appearance. He engages you

in cheerful conversation and avoids all shop talk

business re v ie w

except to say that you will have your operation

$500 or more. Nor is that the end.

at 8 o’clock tomorrow morning and that you will

Some time later, during convalescence at home,

not be given any breakfast. After a loudspeaker

you receive in the mail another shock— the sur

announcement asking all the visitors to leave the

geon’s bill. That may be $300, more or less, de

hospital, a nurse hands you a paper cup and a

pending upon the nature of the surgery. Not

small capsule, designed to help you to fall asleep.

counting loss of income through absence from

The capsule made short work of the night. A

the job, the operation may cost $800— a serious

pair of nurses in spotless uniforms gives you full

blow to the family budget.

attention. Another capsule and another needle

Everyone is a potential hospital patient. In the

and you get dressed up for the party with the

course of a year, at least one out of ten persons

queerest toggery you ever saw. The queerest tog

becomes a bed case for medical attention. Prior

gery you ever . . . the queerest toggery you . . . the

to the first time you land in a hospital, you

queerest tog . . . the queerest . . . the queer . . .

probably had regarded yourself as a superman—

the . . .

perpetual strength in perpetual motion. Hospitali

It is most uncomfortable to be lying on a

zation teaches you that the body you live in is

steeply slanted roof on top of a tall building with

a fragile retort of flushing chemicals and fleet

a tin sheet for a cover and no pillow. But there

ing emotions. With the help of enforced rest the

you lie at a dizzy height— way, way up. Way up,
“ Wake u p!” says the nurse standing beside your

human body usually recovers very nicely from
the physical shock of surgery.

bed, and you ask why all the delay, why didn’t
they perform the operation, and she tells you that

book-nerve is achieved by some people through

it’s all over. Then why can’t you be let alone?

the purchase of health insurance. About 70 mil

Why the brushing of teeth and the bathing fetish?

lion people are insured against the hazard of
hospital expenses. Under these policies the insur

You will surely come apart if the nurse insists on

Recovery from the psychic shock to the pocket-

going through with the bathing ceremony! With

ance companies indemnify the beneficiaries for

persistence on the part of the nurse and no co

hospital expenses incurred. Another form of pro

operation on your own, bathing is completed and,

tection, perhaps less well known, is Blue Cross.

miraculously, you have not come apart.
The days of convalescence get longer and

BLUE CROSS

longer, especially after you graduate from the

Blue Cross is a prepayment program between a

horizontal to the vertical. The body has long since

number of hospitals which offer their services

recovered from the shock of surgery, and finally

and a large number of people who want protec

comes the day when the surgeon says you may

tion on a regular basis against the hazard of hos

go home. When you check out, there is another

pital bills. It is a nonprofit corporation which

shock— the bill. At $18 a day for so many days,

removes most of the money worries of hospitali

the largest item is likely to be room service. Then

zation. The basic principle of Blue Cross is a

there are numerous extras, such as laboratory

service contract— that is, one providing benefits,

fees, drugs, operating room, anesthesia, X ray,

not dollars, coupled with a Blue Cross member

and perhaps blood service, physiotherapy, oxy

hospital contract, under which payment is made

gen, and surgical dressings. The total bill may be

to the hospital for the service benefits guaranteed

business re v ie w

by them. It is a prepayment plan whereby the

ating room charges, drugs, anesthetics, electro

subscribers buy their hospital service when they

cardiograms, laboratory fees, etc. Subscribers

are well so as to reduce the shocks of money

under a group plan need not terminate their hos

worries when they are ill.

pitalization service upon retirement. Upon pay

How it works

ment of the going rates, subscribers may continue
their Blue Cross protection through the period of

Blue Cross is no Santa Claus, but another form

retirement. This is a particularly attractive fea

of protection utilizing the insurance principle.
The subscriber pays for what he gets, and the

ture because the need for hospitalization usually
increases with age.

payments are made in advance in manageable
monthly installments, and the payoff comes on
the day of adversity.
The subscriber may buy the hospital service
by entering into an individual contract with

A prodigious growth
Blue Gross has had a phenomenal growth in the
comparatively short period since its inception. No

Blue Cross or he may subscribe as a member of

one knows when he will need hospital care nor
what it will cost him. The hospital bill for one

a group— usually the firm or company he works

patient with heart disease may be $250 and for

for. Under the group subscription plan, a single

another with the same disease it may be $2,500.

remittance is customarily made by the firm for

The amount depends upon the procedures re

all of its employee-subscribers, and some firms

quired for proper treatment, the drugs adminis

absorb part or all of the cost on behalf of their

tered, the length of stay, and many other factors

employee-subscribers.

— all beyond the patient’s control.

Monthly payments under the group plans range

In 1932, a National Committee on the Costs

from slightly over $2 for individual protection to

of Medical Care discovered that 50 per cent of the

approximately $7 for family protection, where

cost of all medical care in the United States was

all members of the family are covered. Rates vary

incident to hospitalized illness or disabilities.

with the type of contract and in Pennsylvania are

Furthermore, it was found that the 10 per cent of

subject to review and adjudication of the State

the people who are hospitalized each year had to

Commissioner of Insurance.

bear 50 per cent of the medical care costs for that

The benefits to subscribers, depending on the

year. These are the reasons for the widespread

contract, cover most of the hospital costs such as

acceptance of the Blue Cross plan for providing

semi-private room, meals, nursing service, oper-

hospitalization under which payment is made to
the hospital for the service benefits guaranteed

Blue Shield applies to major doctor bills, which
frequently account fo r about half the cost of a
prolonged illness. Blue Shield, though a separate
organization, works like Blue C ro ss with which it
is closely associated. Blue Shield is assisted by
Blue C ro ss in the collection of monthly in sta ll
ments from subscribers and in the remittance of
payments to doctors and surgeons fo r services
rendered to Blue Shield subscribers.

by them.
The Associated Hospital Service of Philadel
phia was started in 1938, with an office force of
five people, a typewriter, borrowed furniture, a
box of pencils, and a $30,000 loan. Today, Blue
Cross of Philadelphia occupies eight floors of a
12-story building it owns in central-city; has
550 employees, a telephone switchboard with 73

busii

iew

trunk lines, a teletype system, electronic data

It is significant that there are more than 80 non

processing machines, and a forest of files. All this

profit Blue Cross Plans throughout the United

is required to accommodate its 21 million sub
/4

States, serving over 55 million subscribers. All

scribers and the 85 member hospitals in the

Blue Cross Plans must meet the requirements of

Philadelphia metropolitan area. Payments to hos

the American Hospital Association. All of them

pitals on behalf of subscribers rose steadily from

render service benefits, as distinguished from

less than $5 million in 1945 to approximately

cash indemnities. Their boards of directors in

$45 million in 1957. Payments in 1957 averaged

clude representatives of hospitals, the medical

$122,000 every day of the year. In the twenty

profession, and the public, and directors serve

years of operation, Blue Cross has paid out over

without pay. Within a period of 25 years, pay

$300 million of hospital bills for approximately

ments of hospital bills for subscribers of Blue

3 million subscriber cases who have benefited by

Cross Plans rose from $15,000 a year to more

receiving hospital care. In 1938, the Mayor of

than a billion dollars in 1957. This is a rate of

Philadelphia took out the first membership card.

growth few industries can match.

Now, 68 per cent of the population of Greater
Philadelphia is covered by Blue Cross.

SOME HOSPITAL ECONOMICS
Maintenance of the country’s 7,000 hospitals

HOSPITAL CARE PROVIDED
The Associated Hospital Service of Philadelphia

costs the American people $5^> billion annually,
and they have more than $12 billion invested in
them. Blue Cross does not own or run any of
these institutions, but it has a direct interest in
the voluntary hospitals which serve its sub
scribers whose bills it pays.
Hospitals are indispensible but peculiar insti
tutions with a strange history. Originally, our
hospitals were charitable institutions for the
down and out. Now they are health-restoring cen
ters for the down and in.
A hospital is like a hotel that merged with a
restaurant, a laboratory, and sometimes a nurses’
training school, medical college, pharmacy, li

The Lehigh Valley Blue Cross has had a simi

brary, and nursery to boot. It takes quite a vari

larly rapid rate of growth during its compara

ety of skills to manage a hospital— bookkeepers,

tively short period of existence. Its membership

engineers, dieticians, doctors, dishwashers, maids,

grew from 26,000 in 1940 to almost 350,000 in

nurses, laboratory technicians, surgeons, physio

1957, and hospital claims paid since 1940 rose

therapists, internes, elevator operators, etc. The

from less than $100,000 to approximately $ 6 ^

doctors are not under the control of the hospital

million. Wherever Blue Cross hospital protection

but they decide who is to be admitted, how long

is available, people are quick to take advantage

each patient is to stay, and the nature of the

of its facilities.

treatment. Thus, medical practitioners exert con

b usiness re v ie w

siderable influence over the expenses incurred by

consumer price index which is 23 per cent above

these institutions, as they must. It is a rare hos

the base. Moreover, it is somewhat disturbing

pital indeed that does not have a shortage of

that the rising cost of medical care shows no signs

beds, nurses, rooms, ice water, and money, and

whatsoever of letting up despite the fact that it

an abundance of patients, visitors, flowers, hypo

costs Si.44 to buy the medical care that cost only

dermics, and complaints. Running a hospital re
quires a depth and breadth of understanding that

a dollar a mere decade ago.

is out of this world. The manager ought to be a
doctor of medicine, law, psychology, economics,

up faster than any of the other major items in
the consumer price index except transportation.

bacteriology, engineering, dietetics, sociology,

As the bar chart shows, the cost of apparel rose

and backing-up drain pipes. The wonder is that

least, and transportation most, but the cost of

hospitals run as well as they do.

medical care rose far more than six of the major

The cost of medical care
Medical care costs money, and in recent years it
has been costing more and more. The costs of

Since 1947, the cost of medical care has gone

items in the consumer price index portrayed in
the chart.

Doctor bills and hospital bills

services, as distinguished from goods, are usually

When illness strikes, people are prone to growl

slow in responding to economic developments,

and grumble about doctor bills, but those whose

but when they rise, they soar. The cost of medical

illness lands them in the hospital have a much
better conversation piece for griping. Look at the

COST OF MEDICAL CARE

accompanying table and see how hospital room
rates have gone up in contrast with doctor bills
and costs of other services. During the past
decade, hospital room rates more than doubled,
which is in striking contrast with the 26 per cent
increase in surgeons’ fees, the 34 per cent in
crease in dentists’ fees, and the 39 per cent rise
in fees of general practitioners. The cost of hair
cuts, laundry service, automobile repairs, and
public transportation all rose more than doctors’
bills and less than hospital room rates.

YOU CAN’T PAY BILLS WITH
INDEX NUMBERS
care more or less paralleled the rising cost of

“ The medical care index, like the whole of the

living in the early postwar years, as shown in the

Consumer Price Index, is designed to measure

chart. After 1951, however, cost of medical care

only the change in price for items of the same

rose much faster than the over-all cost of living

quality and quantity customarily bought by

and now the cost of medical care is 44 per cent

urban wage-earner and clerical-worker families.”

above the 1947-1949 base, in contrast with the

So says the Bureau of Labor Statistics which

'iew

busii

CHANGES IN MAJOR COMPONENTS
OF THE CONSUMER
PRICE INDEX 1947-1958*

upon for more private and semi-private accom
modations; they are performing more out-patient
service; they have expanded programs of medical
and nursing education, and also have expanded
programs of public education. These are all neces
sary functions but it costs money to perform them.
Hospital costs go up or down with fluctuations
in occupancy. In a hospital, the unit of produc
tion is the bed occupied by a patient; an empty
bed produces no revenue and it entails overhead
costs that must be borne by the patients receiving
care. The ideal situation would be to have all beds
occupied all of the time, but a hospital just can
not schedule production like a cheese factory.
Improvements in diagnostic and treatment pro
cedures have shortened the average length of stay

PER CENT

Source: Bureau of Labor S ta tistic s

* Estimated

of patients, and that likewise contributes to
higher per diem costs. Higher bed turnover, to

created and maintains the index. The italics are

borrow a term from industry, increases nursing

our own, for thereby hangs a tale of considera

costs and housekeeping expenses.

ble moment to hospitals, doctors, Blue Cross, and
all people served by them.

Rising salary and wage levels are major causes
of increasing hospital costs. Hospitals must com

Someone has said that hospital care today is

pete with industrial and commercial concerns in

as different from such care fifteen years ago as

the general labor market to get their complement

today’s aircraft differs from that fifteen years

of employees with diversified skills and talents,

ago. Medical science has not been standing still.

(Continued, on Page 10)

Although hospitals do not practice medicine, they
supply the housing, machinery, tools, and all the
other supplies and facilities required by the doc

PERCENTAGE INCREASES IN COST OF
MEDICAL AND OTHER SERVICES, 1947-1957

tors who practice medicine within their walls
Index I 1947-1949 =

with ever-advancing technology. A complicated
piece of machinery like an artificial heart or an
artificial kidney, which keeps a patient alive while
the surgeon is operating on the organ, may cost
$300 just to set up the machine and run it while
the surgery is being performed.
Hospitals are constantly being called upon to
perform a variety of services. Surgery is not the
only function. Hospitals are offering increased

B .L .S . Item

100)

1947
H o sp ita l room r a t e s ......................
Public tra nsp o rta tio n ...................
M en's h a irc u t s ..................................
Laundry s e rv ic e ...............................
A utom ob ile re p a irs ......................
General p ra c titio n e rs' fees . . . .
D e ntists' f e e s ....................................
M ovie a dm issions ...........................
Shoe re p a irs ....................................
Surg eons' f e e s ..................................

1957

Percent
increase

87.4
88.6
94.3
94.2
95.5
96.9
95.2
9 8.4
97.1
96.2

187.3
178.8
159.3
137.4
139.7
134.5
127.4
130.5
125.6
120.9

1 14
102
69
46
46
39
34
33
29
26

diagnostic and treatment services. They are called

A NEW CAPITAL PIPELINE FOR SMALL BUSINESS
______

funds and capital only to the extent that invest

CONGRESS J

private sources. In granting licenses to invest

ment companies are unable to obtain funds from
ment companies, it will undoubtedly give pref

Small business,

erence to those that contemplate the mini

$250 MILLION

oftimes pictured as the

.w
S

poor relation of American
free enterprise, is in line for some

mum use of public funds.
The new investment companies will

Congress passed the Small Business Investment

ways. They will provide capital by pur

Company Act last August. The new law is de

chasing convertible

signed to help supply small businesses with the

will also make long-term loans.

long-term funds they need to grow into larger
businesses.

SMALL BUSINESS
ADMINISTRATION

debentures.

wishes, exchange the debentures it has
purchased for stock. Its loans will usu-

the problems of financing small business is a new

has reduced the risk of investing in small busi
ness and, to a still undetermined extent, increased
The tax laws now permit small business invest
ment companies to treat losses on convertible
debentures and stock as ordinary loss deductions
instead of capital losses. Furthermore, owners of
investment companies may treat losses on invest
ment company stock in the same manner.
Tax modifications have also increased the po
tential return. The dividends an investment com
pany receives from stock it holds in small busi

kind of financial institution— the small business

with a maximum term of

investment company. Investment companies, the

20 years.

legislators hope, will attract large amounts of
private capital and channel it into many of the

income tax. And there are other new tax bene

panies will be able to borrow from

nation’s four million or so small businesses.

nesses are completely exempt from the corporate

In addition, investment com
the SBA up to 50 per cent of their paid-in capital

The Small Business Administration

They

An investment company can, when it

The keystone of this most recent approach to

Through several related tax provisions, Congress

the possible return.

help small businesses in two principal

additional financial help in the near future.

TO REDUCE THE RISK AND
INCREASE THE RETURN

(SBA ),

and surplus. These loans will also carry an inter

which is administering the program, recently

est charge of 5 per cent and have a maximum

issued its regulations. It is now accepting applica

term of 20 years. The SBA has indicated, how

tions from would-be investment companies. The

ever, that it will primarily make short-term loans.

first licensed companies will probably begin

directly accrue to investment companies.
The new pipeline will soon be in place.

Investment companies will be able to use the loan

operating early in 1959.

fits for small businesses themselves that will in

funds as cash reserves until they are able to build

INVESTMENT COMPANIES FOR
SMALL BUSINESS
Ten or more persons may form a small business
investment company. Each company must have a

SMALL BUSINESS
INVESTMENT
COMPANIES

The next few years should tell whether
Congress has made small business
investment attractive enough to
substantially increase the flow
of capital.

up sufficient capital of their own.
Investment companies will, of course, be able
to borrow from private investors also. In total,
they may normally borrow up to $4 for every
$1 of capital and surplus.

paid-in capital and surplus of at least $300,000.

Congress has authorized $250 million under

ally be for a term of 5 to 20 years.

An investment company may get up to $150,000

the new law. It is clear from recent statements

of its minimum capital requirement by selling

that SBA is going to make this money go as far

Existing state usury laws will limit the
interest it can charge on both deben

subordinated debentures to the SBA. The SBA
will charge 5 per cent interest for these funds

as possible. It has put the emphasis, in its regula

tures and loans. Where there is no legal

tions, on private financing. It will provide loan

limit, the SBA will set a maximum.

SMALL BUSINESSES
8

b usin e ss re v ie w

( Continued from Page 7)

and as a result of rising wage-salary scales gen

creased special services to vertical patients

erally, hospitals are under constant pressure of

referred for study and treatment by physi

rising costs to get and keep adequate staffs.
Still another cause of rising hospital costs is

cians; better scheduling of admissions, dis
charges and professional procedures to

the readier disposition of a rapidly growing pop

avoid the necessity of expanded facilities

ulation to utilize hospital services when needed.

for beds and scientific equipment.)

Scarcely a generation ago, people were scared of

“ More effective use of professional and

hospitals and shied away from them like the

institutional personnel ( the employment of

plague. Indeed, there was a time when, in the

practical nurses, aides and technicians to

opinion of some people, hospitals delayed rather

perform certain functions under the direc

than hastened the restoration of the health of its

tion of professional nurses.)

patients. In this generation, however, it is the

“ More scientific procurement and use of

rare person who does not accept hospitalization

supplies and materials ( the adoption of

on recommendation of his doctor; the annual

uniform standards to permit large-scale

in-patient admission rate has increased from 8 to

buying for departments; simplification of

12 per cent of the total population.

sizes and types to reduce manufacturers’

Curbing the costs

cost; joint buying of commodities where
specifications can be applied to generally

As might be expected, no two hospitals are alike

used items; systematic storage and issuance

nor are their cost curves alike. Identical treatment

procedures; group conferences and action

of identical cases may cost 30 to 40 per cent

among hospital purchasing agents concern

more in one hospital than in another. Variations

ing purchasing methods; standards o f qual

in cost arise from differences in age of buildings

ity, delivery schedules, etc.)

and equipment and differences in managerial
policies and performance.
Efforts to reduce hospital costs are exerted in

“ Uniform accounting and statistics. More
effective use of uniform accounting and
statistics would enable hospitals to appraise

four major areas: more effective utilization of

the results of varying methods and prac

facilities, improved personnel practices, better

tices, and to compare the experiences with

procurement procedures, and improved account

those of other institutions. The information

ing practices. C. Rufus Rorem, Executive Direc

obtained through adequate and uniform

tor, Hospital Council of Philadelphia, points out

records and reports, if properly applied

( in the March 1957 Journal of the American

would, in my opinion, increase services in

Hospital Association) four major areas that have

most hospitals without additional expense.”

been effective in controlling the cost incurred by
hospitals in serving patients.

Blue Cross has a very real interest in keeping
hospital costs at a minimum because all of its

“ More effective utilization of beds and diag

income collected from subscribers is used to pay

nostic and treatment facilties ( reduction of
number of beds per room to permit alterna

hospital bills except for costs of administration.
In Philadelphia, 93 cents of every dollar col

tive use by various types of patients; in

lected from subscribers is available to pay hos

b usiness re v ie w

pital bills.
Some people say that Blue Cross Plans, by their

where shortages usually prevail, and penalizing
doctors for nonconformance with the rules.

very nature, promote unnecessary hospitalization,

Blue Cross rates have gone up from time to

that some doctors either on their own or under

time as a consequence of rising hospital costs,

pressure of their patients are too quick to send

increased use of hospitals, and improved hospital

patients to hospitals and too slow to discharge

care provided. The statement has been made that

them. The problem, whatever its magnitude, is a

Blue Cross is in danger of pricing itself out of the

medical problem and should be solved by the

market. Blue Cross rates, however, have gone up

medical staff. Doctors themselves should and

only because hospital costs have gone up; so

must decide what is best for their patients. Con

what the statement really means is that hospitals

certed efforts are being made to eliminate the

may price themselves out of the market. The

abuses of Blue Cross privileges. Blue Cross has

probability of that happening is just about as

tightened its contract provisions with subscribers.

great as the chance that people will stop eating

The Pennsylvania Insurance Commissioner has

because the cost of food is too high.

authorized Blue Cross Plans to make expendi

Suppose that all of our hospitals were modern

tures for instituting reforms to eliminate abuses

and up to date, that all were adequately staffed,

in the use of hospital care.

that all inefficiencies were eliminated, and that

Blue Cross of Philadelphia has given wide

all costs had been cut to the irreducible minimum.

spread publicity to an effective plan devised by

As a result of all this, it might be possible to

the Sacred Heart Hospital of Allentown for the
elimination of unnecessary use of hospital facili

reduce your hospital bill materially. Whatever the
reduction in the size of the bill, it would still be

ties. In order to eliminate Blue Cross “ boarders,”

a shock to the individual. This is not to say that

that hospital set up a plan for admitting patients

unnecessary costs should be tolerated, but there

based upon the degree of urgency, and systematic

is no escape from the simple and obvious truth

procedures were established to shorten the stay

that it costs money to run a hospital and, as

of each patient. The plan includes features such

someone has said, “ It isn’t so much the cost of

as quicker transfer of patients to specialists,

the thing as the uncertainty of it that causes most

scheduling of X-ray and laboratory tests before

people to complain about hospital bills.” The in

admission, speeding up requests for consultation,

surance feature of Blue Cross eliminates that big

moving up the check-out time before 11 a.m. to

uncertainty and substitutes for it a small constant

save a day’s room charge, no shifting of patients

cost. For family protection, that amounts to the

from private rooms to semi-private or wards

price of a daily pack of cigarettes.

CHRISTMAS BUYING
LOOKS GOOD

This year’s Christmas buying season at depart

this whole period seemed to indicate a preference

ment stores in the Philadelphia Federal Reserve

for soft goods lines, the late summer and early

District seems to be going well. And, unlike last

fall brought an encouraging improvement in the

year, holiday business was preceded by a period

demand for some durables, including major ap

of many weeks in which sales were an element of

pliances, television, and the recently introduced

considerable strength in the local economy.

stereophonic sound equipment. This trend was

For this District as a whole, dollar volume at

apparent in the breakdown of department store

department stores was maintained above 1957

figures and it was hopefully mentioned by many

levels in all but two weekly periods from July

of the appliance dealers with whom we discussed

through November. Moreover, in better than half

the situation.

of these weeks the margin of increase over 1957
ran to 5 per cent or more.

Pre-season spending patterns changeable
Although the pattern of consumer spending in

For a time it looked very much as though 1958
might be much more of an appliance Christmas
than 1957 turned out to be. But, after October,
consumer buying interest in these “ big ticket”
durable items seems to have waned. Some de

b usiness re v ie w

partment store executives and appliance dealers,

to purchase their gifts early. Perhaps they re

particularly those in our smaller metropolitan

member the last-minute crush that wound up a

areas, remained optimistic as the Christmas sea

record 1957 Christmas season.

son approached. However, a marked diversity of
opinion has developed and many of our mer

Price consciousness in many places

chants are expressing doubt as to just how much

It would be most unusual if shoppers did not take

appliances,

a second look at a price tag now and then. They

television,

and

similar

expensive

equipment will contribute to the Christmas sales

are acutely aware that consumer prices continued

totals.

to rise during the recession and early recovery

This renewed hesitancy of consumers (they are

and have only recently leveled off. And if a gift

Christmas shoppers now) to commit themselves

can be bought somewhere for less, that’s where

to a heavy expenditure for a single item is in line

they will go. So our merchants have to be careful

with the latest findings of the University of

about markups on this season’s merchandise. The

Michigan’s Survey Research Center. This report,

competition is keen everywhere and in just about

covering conditions in the country as a whole,

all departments.

noted a surge of consumer optimism beginning
just after mid-year. But it also established the

Selections in gift merchandise

fact that this optimism was tempered with cau

Some merchants tell us it is a little early to define

tion when it came to making expenditures for

trends in strictly gift merchandise. Others say

the more costly durables, including appliances.

business in what might be called luxuries is al
ready in the limelight. But that does not neces

Shopping vs. buying

sarily mean expensive luxuries. These articles

Thanksgiving, by tradition, marks the beginning

usually are not purchased in quantity until much

of the Christmas shopping season everywhere.

later in the season. The term as used here must

And on the day following, it is “ situation normal”

be defined more nearly as items ordinarily in

for retail merchants to play host to the crowds

greatest demand at Christmastime.

of shoppers intent on examining all the wares

As might be expected, sportswear and a wide

that are offered. Sometimes these preliminaries

range of merchandise peculiar to sporting goods

take many days. That is how it was last year.
But this 1958 season seems to be shaping up

departments are said to be having a pretty good
fling right now. Furniture seems to be the chief

differently.

“ big ticket” item moving in many of our metro

Many of the department store executives we

politan area department stores. Small appliances

have talked with lately tell us that buying is going

like toasters, clocks, and portable radios are said

hand-in-hand with shopping. Their impressions

to be selling well. But, in all fairness, it should

of early season business suggest a higher rate of

be mentioned that in some cases these items have

sales than in the same period last year. In some

been competitively priced and so advertised to

cases a store-wide promotion sale has opened

serve as early season drawing cards.

shoppers’ pocketbooks. But for the most part

To be sure, toys are a leading item everywhere

people are not just bargain hunting; this year’s

at this time of the year. But some of our depart

crop of Christmas shoppers appears more anxious

ment store executives appear not too happy with

b usiness re v ie w

the response so far. Except for the major appli

after year. Yule sales are important to all of

ances, television, and the like, toys appear to be

them, because such a large percentage of a full

about the most competitive item on the Christ

year’s business normally falls in the weeks be

mas market. Many retailers, regardless of their

tween Thanksgiving and Christmas. In the case

regular lines, accumulate a wide assortment of

of our department stores that ratio comes some

toys at this season. As the competition sharpens,

where around the 15 per cent mark.

discounts increase, and prices fall by the way-

But when you get down to cases— the more

side. In this respect the 1958 Christmas buying
season is not too different from any other.

realistic expectations based on early season per
formance— you are bound to find some diversity

How the season stacks up
There was scarcely a merchant among those we

of opinion. This year more of our department
store executives expected to beat last year’s rec
ord by a small percentage. Almost everyone saw

talked with who did not say this season’s business

an excellent chance that dollar sales would at

should come up to that of a record 1957. In fact,

least equal 1957. Only in an exceptional case or

it would be a defeatist attitude for almost any

two was the thought expressed that it might be

retailer to see anything unusual about Christmas

hard to repeat last year’s performance for the

sales going on and on to set new records year

whole Christmas season.

business review
F E D E R A L

R E S E R V E

B A N K

P H I L A D E L P H I A

TABLE OF C O N TEN TS-1 9 5 8
JA N U A R Y

1957: End of an Afterm ath?

(Annual Report Issue)

O perations of the Bank: 1957 vs. 1941

FEBRU A RY

The Electronic Abacus
Th ird D istric t Banking— 1957
O u r Growing Supply of Housing

M A RC H

A Flexible Monetary Policy
Pennsylvania's Billion Dollar Babies

A PRIL

On Vacation
The Talk of "A uto m ob ile Row "

MAY

S t ill on Vacation
Capital Spending: S t ill Falling

JU N E

Borrowing from the Federal Reserve Bank—
Some Basic Principles
Small Business in an Age of Big Business

J U LY

P .I.D .A .— A Look at State-wide Ventures
in Industrial Development
Philadelphia Business Trend s Since M id - 1957
Vacation Business

A UG UST

The New Era in Eating
Housing Prospects A re Improving

SEPTEM BER

Penn's W ood s
Th ird D istric t Banking

O C TO BER

How Liquid A re the Banks?
Th ird D istric t Farmers Have a Better Year

NOVEMBER

Capital Spending: Down Again
The Clothes-Buying Man: M ore Lemming Than Peacock?

DECEMBER

Health Isn 't Free
A New Capital Pipeline fo r Small Business
C hristm as Buying Looks Good

F O R TH E R E C O R D . . .

Factory Payrolls and Employment Revised

Th ird Federal
Reserve D istric t

Oct. 1958
from
mo.
ago

year
ago

10
mos.
1958
from
year
ago

Oct. 1958
from
mo.
ago

year
ago

10
mos.
1958
from
year
ago

Department Store
Check
Payments

Employ
ment

Payrolls

Sales

Per cent
change
Oct. 1958
from

Per cent change

SU M M A RY

Factory*

United States

LO C A L
C H A N G ES

mo.
ago

year mo.
ago ago

Stocks

Per cent
change
Oct. 1958
from

year mo.
ago ago

Per cent
change
Oct. 1958
from

year mo.
ago ago

year
ago

O U TP U T
Manufacturing production
Construction contracts . . .
Coal mining ........................

— i
+46
0

— 8

— 12

+ 103

+ 5

— 13

-2 3

+ 3
+ 3
+ 3

— 2

+27
— 14

8
+ 9
-2 1

0 — 9 +

EM P LO Y M EN T A ND
IN C O M E
Factory employment
(Total) ................................
Factory wage income . . . .

1 —1
1

+
+

4 - 1 — 1 — 2 — 17
1
— 6

— 7

— 6

— 7

— 1

+ 9
+ 2

+ 9
+ 1

+ 7
+ 3

+ 5

0
1

+ s

1 — 4 — 3 +

1 -

4 -

Sc ra nto n........
1
0
+ 1
+ 1

+ i
+ ?t

+37

5 +

6 +

+ ii

8 +u

2 +12

8 + 19 +

+11

+15
+ 13
+21
+ 8f

4“ 1
+ 10
+ 7
+ 18
+ 2f

+ 1
+ 1
+ 1
+ 1
+ 1
+ 9

3 + 13 + 10 + 13 +

9 +

+ 2f

0
0

5 +

— 1

— 2

B A N K IN G
(A ll member banks)
Deposits ................................
Loans ......................................
Investments
........................
U .S . Govt, securities . . . .
Other ..................................
Check payments ................

0 — 6 +

2 +

1 +24

— 9

TR A D E*
Department store sales ..
Department store stocks .

1 — 5 — 2 — 1 +

Reading ........

— 9

0 — 3 +

Philadelphia . +

0
— 1

Lancaster . . . .

2 — 7

+ 7
+ 2

+ 6
+ 2

Trenton ..........

— 5 -2 0

+ 17
+ 17
+ 17
+ 4

+ 13
+ 12
+ 16
+4

W ilke s-B a rre .

6 +

— 5 — 17 +

0 — 5 +

1 — 2

9 — 1 — 7 +

W ilm ing to n ..

— 5 -

York ................

— 2 — 4 +

4 + 10 + 2 0

6 +

2 — 1

2 + 2 + 10 -

5 +

7 +

0 +31

4 +

7 + 15 +

P R IC E S
Consumer

............................

ot +

’ Adjusted fo r seasonal variation.

f20 C itie s

+ 1
+ 2

+ 1
+ 3

f Philadelphia

0 + 9 + 9 + 10 + 2 + 4

*N o t restricted to corporate lim its of citie s but covers areas of one
o r more counties.

a c h ie v in g

;

ADMINISTRATIVE
COMPETENCE

Supplement to b u s i n e s s r e v i e w December, 1958
F E D E R A L

R E S E R V E

O F

P H I L A D E L P H I A

T w o A ddresses
by
R obert N. H ilkert
First V ice President
Federal Reserve Bank of Philadelphia
before the
Pacific Coast B anking S ch ool
at the
U niversity of W ash in g ton
Seattle, W ash in g ton
A u gu st 28-29, 1958

ACHIEVING
ADMINISTRATIVE
COMPETENCE

Part I: The Supervisor
Why do most of us go to banking schools? There

“ The Affluent Society” : “ Wealth is not without

are numerous answers, plain and fancy, righteous

its advantages and the case to the contrary, al
though it has often been made, has never proved

and not-so-righteous, that one might give.
I

think most of us go because we want to ad widely persuasive.” So it is with being boss.

vance ourselves in the banking business. Plainly

This is putting it pretty bluntly. If it sounds

speaking, this means we aspire to be a boss, a

crass or too materialistic, as I am sure it may to

bigger boss, or the big boss. There is nothing

some, at least it will provide a springboard for

inherently wrong with wanting to be boss. The

panelists to launch into attack position. I hope,

job

and

however, as we go on to develop our ideas that

money; perhaps not a lot of money, but at least

no one will come to believe that I am talking

carries

prestige,

power,

authority,

more than goes with not being the boss. Most of

about a low order of motivation. On the con

us actively seek this prestige, power, authority,
and money that goes with being boss.

trary. I have profound respect for the basic quali
ties and abilities which are ingredients of first-

There is here something of a similarity to the

class business leadership. My references to bosses

opening sentence of John Galbraith’s recent book,

apply to admirable men.

Some people avoid use of the word boss as

traits that are good or bad. So, let us take off

they would the plague. We have a large depart

now on the subject of the boss— “ the man we

ment store in Philadelphia in which the word

work for.”

employe is similarly avoided. This store doesn’t

The boss is in a position of authority. This
means he has power over other people. Possibly

have employes; it has co-workers. The plain fact
of the matter is that this store has bosses and it

he has become boss because he has a will to

has employes, and nobody is being fooled very

power. Through the exercise of power he has an

much through the avoidance of common terms.
For two evenings we are going to discuss the

important influence over the lives of others. Dress
it up any way we like, we cannot escape one fact

subject of bosses, on the assumption that we

inherent in the superior-subordinate relationship,

want to be bosses, and on the further assumption

for such it is— this power over people. One may

that everyone who is employed, at whatever level,

exercise it in such manner that it becomes power

wants to have a good boss. Just to focus on the

with people, but power over people still persists.

importance of the second assumption, let me ask

It seems important to emphasize this fact of
power because it makes so clear the fact that it

this question, “ Does it make any difference to
you whether you have a really good boss, or just
a plain, ordinary stinker?”

must not be given to the wrong kind of person.
We know full well the dangers of power in wrong

For purposes of our basic discussion I should

hands. Remember Lord Acton’s dictum, “ Power

like to side-step some problems of technical defi

always corrupts, and absolute power corrupts

nition: first-line supervisors, second or third ad

absolutely.” I don’t believe the first part of this

ministrative echelons, managers of line or staff;

at all. Power doesn’t always corrupt. But I do

or questions such as, “ Who is a supervisor any

believe firmly that there is great danger that it

w ay?” I just want to discuss the man we work

may do so. It may unless the person having

for. Sometime later, if we wish, we can talk about

power has strength of character, nobility of pur

the kind of boss we work with rather than for,

pose, and human understanding. Is spiritual
power corrupting? Is moral power corrupting?

but at this point that kind of talk serves only to
confuse. Most of us can identify our boss as “ the

Is there not the power of inspiration? What of

man we work for,” and there is no reason to

the power of good example? The power of

make it more complicated.

humility ?

Permit me to clear out one more bit of under

We are, however, dealing with power that is

brush. Some people don’t like to use the word

inherent in authority. It is dangerous. It re

boss because it appears to connote certain un

quires education in its use. It calls for safeguards.

desirable characteristics. True, there is one defini

Above all, it should be given only to those who

tion that refers to being “ too domineering and

give reasonable expectation that they will use it

authoritative” but that happens to be the number

wisely. We should choose bosses with the greatest

five definition in the dictionary I use. Why pick

of care because in appointing them to their posts

number five? The first defines the boss simply as

we automatically confer upon them this power
of authority.

“ one who employs or superintends workmen; a
foreman or manager.” No qualities given. It

In the achievement of administrative compe

leaves open the question of whether a boss has

tence it is of the utmost importance that the boss

be at all times aware of the dangers inherent in
the power of authority. The awareness arises
from continuous self-examination. Do we our

4 The right of every man to develop and
make use of his highest capabilities.
5 The right of every man to fairness and

selves, for example, have the strength of character,

justice

nobility of purpose, and the human understand

superiors.1

all his

relationships

with

ing which enable us to exercise the power of

It is difficult to comprehend just how the super

authority wisely? This is difficult to answer for

visor, the boss, or the executive, the bigger boss,

ourselves. To “ Know Thyself” is one of the

can operate effectively without belief in these

highest attainments of mankind. Self-analysis and

basic rights. Without full appreciation of these

self-appraisal are indispensable, but we require

rights, he has no guide to the exercise of the

more than this. We need the continuing critical

authority and power which are inherent in the

evaluation of others who observe us, who are

job he is called upon to perform. He sails with

competent to judge, and who will give honest an

out benefit of compass. Seldom are bosses failures

swers and constructive advice. We must actively

because of technical incompetence. Most bosses

seek this help so that we may avoid the common
corrupting pitfalls. Paraphrasing Robert Burns,
“ Would that we might have the gift to see our
selves as others see us.”
The safeguard does not have to be unioniza
tion, although it is clear historically that union
ization stemmed from the desire of individuals
to protect themselves from the arbitrary or capri
cious exercise of administrative authority or
managerial power. We may leave for panel dis
cussion the question, “ What administrative safe
guards may we have to keep the power of
authority within proper bounds?”
Properly to exercise power requires the leader
to have knowledge of and respect for the rights
of all members of the organization, bosses and
all others. What rights? These have been suc
cinctly stated by Ordway Tead as follows:
1 The right of every man to be treated as

who fail do so because of lack of human skill.
One approach to the acquisition of human skill
is to test one’s every act, every decision, in terms
of these rights. Supervisory training is barren
indeed when it focuses primarily upon tech
niques rather than upon, yes, philosophy.
This is all very well, you are saying to your
selves, but we must be practical. This is a worka
day world and the job of the boss is to see that
the work gets done. I agree. I go along with
Larry Appley and the American Management
Association’s definition that “ management is the
accomplishment of results through the efforts of
other people.” The job of profit-seeking institu
tions, and that includes banks, is production. We
are interested in high-quality output at low unitcost. So, if we are primarily interested in output
why not focus upon production rather than upon
the basic rights of man?

an individual and respected as a person.

The answer to this has been demonstrated

2 The right of every man to a voice in his

many times. People have an enormous capacity

own affairs, which includes his right to

to do better, or to do worse. They can increase

contribute to the best of his ability in the

or improve production, or they can withhold,

solution of common problems.

hinder, “ soldier” — call it what we will. Remem

3 The right of every man to recognition
for his contribution to the common good.

ber the account of the rebuilding of the wall of
’ The A rt of A d m inistration, by Ordway Tead, M c G ra w -H ill.

Jerusalem found in the Book of Nehemiah, and

put this danger in a somewhat different light.

the noble verse, “ so built they the wall, for the

The danger is that power and authority will not

people had a mind to work.” The mind to work

be accepted. This is the beginning of organiza

— is this something arising solely from tech

tional deterioration. Just as “ where there is no

niques or know-how? Or does it stem from

vision the people perish,” so it is that where there

motivation, or inspiration, or something that

is no acceptance of constituted authority the

somehow touches the heart?

organization fails.

How can a boss do his job of getting out pro
duction unless he knows what it is that makes

How does the boss earn the group’s acceptance
of the authority which has been conferred upon

people produce— makes them want to produce;

him through his appointment to his position?

because people who don’t want to, who haven’t
the mind or will to work, won’t produce very

And for the rest of this first evening let us con
sider the boss to be a supervisor, a man who has

much. Administrative competence includes know

as subordinates only those workers who may be

ing what it is that makes people want to do their

called rank and file. Most of what we have to say

best, and then acting in the full light of that

will, however, be equally applicable to the super

knowledge.
Curiously enough, this brings us back to the

visor’s own boss, say a department head, or to

problem of power and authority. Degree of pro

essential part of the business of achieving admin

ductivity is related to the way individuals and

istrative competence.

his boss. The earning of this acceptance is an

groups respond to the power or authority of the

First of all, the boss should demonstrate that

leader. A business organization is not a totali

he has genuine understanding and appreciation

tarian or dictator state. Men are appointed to

of the five basic rights already enumerated, and

positions of authority but the effectiveness of the

he should give clear indication that these are

response they get from others has to be earned.

beliefs he lives by in the performance of his daily
tasks.

Good management can never rely for its effective
has authority to be sure, but half-hearted accept

We can discuss these from another angle. The
boss should clearly understand two sets of objec

ance of that authority— and the corporate world

tives, those of the bank and those of the people

ness upon superior position or status. The boss

is filled with examples of half-hearted acceptance

who work in the bank. Fundamentally, the bank

— invariably results in substandard, high-cost

exists for the purpose of providing top-quality

performance. The leader whose authority isn’t

services to the community in such manner as to

fully, or at least highly, accepted by the group

produce profit. We who are employed have other

has no chance of administering competently.

objectives. We want to earn a living for ourselves

This is an old story. We can lead the horse to

and our families. We seek reasonable protection

water but we can’t make him drink. Administra

against the hazards of sickness, old age, and

tive competence shows itself when the horse

death. We look for opportunity to advance in

drinks, and does it willingly.

position, prestige, and status. We want to find

We have pointed to the dangerous nature of

some fair amount of joy and happiness in our

power and authority. We have warned against

work. I have seen numerous studies, dolled up

conferring it upon the wrong people. We now

statistically, which endeavor to rank these in the

order of their relative importance to employes.

boss is not working for his subordinate employes

Does money come first, or is it third? Much of

he is in fact selling the bank short. He cannot

this is a waste of time. Each of us looks for

administer competently by acting as though it is

money, security, prestige, recognition, status, the

only the bank that has rights and goals.

joy of achievement, and all the rest. The value
we place upon each is subject to a great variety

should like now to take issue with an idea

that one often sees in print or hears from the

of conditions. We want all these things; and I

speaker’s platform. It is that “ a happy and con

guess we tend to place special value on those we

tented workforce is a productive workforce.”

presently have in least amount. If I enjoy my

Well, it may not be. Contentment and productiv

work but get low pay for doing it, I begin to think

ity do not necessarily go hand in hand. It is

about the importance of compensation. If I am

possible for employes to be so contented that they

paid well but have inadequate protection against

do not permit work to interfere with their gra

the hazards of illness or old age, I dwell on the

cious living. How often have we heard company

importance of security benefits. The value I place

presidents say, “ I want my employes to be able

on each varies with age. When I am young I

to say that my shop is a good place in which to

may be eager-beaverish about getting ahead, and

work.” Fine, but it isn’t enough. The goal should

I become frustrated at lack of opportunity. With

be to have them add, “ And believe me, we pro

retirement around the corner, my ideas change.
And so it goes with respect to changes in marital
status, dependency, etc.
The boss should know about these objectives.
Further, he should come to know his subordinates
so well that he understands their ways of thinking
about them. Employes should perceive that the
boss is working to help them achieve their objec
tives. He will never gain full acceptance by focus

duce!” Unless the boss works with this goal in
mind it is unlikely that he will become a compe
tent administrator.
Here is something else requiring more analysis
than we usually make. During the recent past,
industries — including banking — have moved
along three main roads to improve employe well
being. They are:

ing solely upon the objectives of the bank. This

1 Wages and salaries. In this we include all

is what makes his job so difficult. He has the

the ingredients of modernized, sound

problem of paying attention to the bank’s objec

salary administration. (You might pos

tives and to those of employes. The boss is work

sibly wish to discuss these ingredients

ing for the bank, but he also has the job of

later.)

working for his employes. It takes great skill and

2 Fringe benefits. You know them— vaca

resourcefulness to do both. When employes come

tions and holidays with pay, sick leave

to believe that their boss is not working for them,

plans, hospitalization and surgical bene

but solely for the bank, they will not look upon

fits, severance pay, group insurance, and

him as a leader to be followed, except perhaps
perfunctorily. They may perform, but they will

all the rest.
3 Extra-curricular activities. This includes

not perform well. To the extent that they do not

all social and recreational activities that

perform well, the bank’s objectives will not be

are company-sponsored. Parties, picnics,

met. This is another way of saying that when the

and bowling!

Generally, all this has been for the good —
although even here you might wish to register

value in personalizing.
I

have never had a job that I simply couldn’t

a few doubts. The point I wish to make, however,

do. I know that there are many jobs— many in

is that common to all three is the fact that none

my own bank, at which I would fail miserably.

can be used while the employe is on the job.

I’ve just never been assigned to them. Please

Illustration will make this clear.

don’t think I am trying to give an impression

Wages and salaries. The employe, or more

that I’m so smart I could do any of my assigned

likely his wife, spends the paycheck off the job.
Fringe benefits. Vacations and holidays with

jobs with one hand tied behind my back. At

pay, the employe is away from work; sick leave,

but I was sufficiently confident that if I worked

he’s probably in bed; hospitalization, he’s you

hard enough at them I had a better-than-even

know where; severance pay, he’s lost the jo b ;

chance of making good. The point is that I have

some of them I have had to struggle pretty hard;

insurance, he’s dead. Test for yourself any of the

not been assigned the wrong jobs for me. My

others— cafeterias, coffee breaks, rest periods, etc.

bosses were administering with understanding

Extra-curricular activities. By definition, the
employe is away from the job.

and managerial competence.
At the same time— and I know I have been

It is apparent that the boss, the supervisor,

fortunate— there has always been someone in

can’t administer successfully by relying upon

the offing— the boss, a colleague, and I mustn’t

salaries, fringes, and recreational activties to

forget my wife, who bolstered my confidence

solve the on-the-job problems and needs of em

when I was discouraged. Believe me it feels

ployes. Somehow he should get at the business of

good to have a boss around who wants you to

helping each employe to find satisfaction in his

make good, who helps you to make good, and

job performance, to experience pride of accom

who rejoices when you succeed. My bosses have

plishment. There is such a thing as “ joy of work.”

been competent bosses in the highest sense of

People who do not feel it are being cheated out

the word.

of one of life’s greatest and most satisfying ex

In nearly every job, although not all, I have

periences. In this area lies a real administrative

felt that my efforts were appreciated. It is good

challenge to every supervisor, every executive.

that I have had both experiences because one
knows how important is appreciation by experi

Acquiring administrative competence includes
making continuous progress in meeting this
challenge.

encing its opposite. But let’s forget the exception.
My bosses have never made me feel that I am

At the risk of going over territory that you

just a cog in the machine, just a payroll number.

have no doubt explored many times, I should

They have made me feel that I am a person in

like to comment briefly on some of the elements

my own right. I have been discouraged, I have

that I believe lead to job happiness. Everything

felt the sting of my own mediocre performances,

I say can be found in any textbook on personnel,

I have been subjected to strong constructive

but I am drawing solely upon my own experience

criticism, but I have never felt unimportant.

by endeavoring to think through why I have

Small, yes, but not unimportant!

been happy myself doing the jobs I have per

The other day I was reading Erich Fromm’s

formed in some thirty years of working. There’s

volume called “ The Sane Society” and came

across a sentence that I immediately recognized

I haven’t really gotten into the specific topic of

as belonging somewhere in this talk. It belongs

supervisory development, certainly not very far

here:

with respect to programming. It has been with
. . this need for a sense of identity is so

design. So far I have simply tried to make five
principal points:

vital and imperative that man could not re
main sane if he did not find some way of

1 The selection of a supervisor must be

satisfying it. The need to feel a sense of

made with great care because he acquires

identity stems from the very conditions of

power and authority over people. Only

human existence and it is the source of the

grief can come to the organization if

most intense strivings.”

power and authority are placed in the
wrong hands.

Shouldn’t a supervisor know this? Can he under

2 The first step in the training of a super

stand his subordinates if he doesn’t know it? Can

visor is to instill in him an awareness of

he administer competently if this kind of under

this power and authority situation: (a)

standing is foreign to him?

the dangers of misuse and abuse, and

How would you like to have a boss who has

(b) the problems of inadequate accept

the sense and the skill to put you on the j obs that

ance. Inherent in this awareness is the

are right for you, who doesn’t give you assign

fact that effective response to authority

ments that are wrong for you? How would you
like to have the kind of boss who works for you,
helps you succeed by setting right examples, by

must be earned.
3 The main job of the supervisor is to

rejoicing when you’re up and encouraging and

achieve results through people who are
his subordinates. His goal is quality pro

stimulating you when you’re down? A boss who
appreciates having you on his team, who treats

tratively competent he must understand

duction at low unit-cost. To be adminis

you as an individual in your own right, who
makes you feel important. A boss who is a better

what causes people to produce at top

man than you are but who is trying hard to make

4 In achieving production he should realize

efficiency.

you a better man than he is. Suppose you had

that people do best when their own goals

a boss like that, would you work hard for him?

are being met. Therefore, he should un

Would you let him down? Would you soldier on

derstand employe objectives, and his

the job, or would you try to outdo yourself?

supervisory job should be performed so

What happens to production, to quality of output,

as to help his subordinates attain them.

under these conditions? Does this shed any light

He should do it in such ways that they

on what we are talking about when we use the
term administrative competence?

can perceive that he is working for them.
5 These points add up to a basic truth. Su

In our correspondence about these two eve

pervising people is an administrative

ning sessions it was suggested by the school that

process applying more to people than to

on the first evening we should center our atten

things. The more difficult tasks center on

tion on supervisory development and the second

human relationships rather than upon op

on executive development. It may seem as though

erating techniques. Administrative com

petence rests not exclusively upon social

to train him short in the realm of social and

or human skills, but such skills are re

human skills and to concentrate on the areas

quired in high degree. The implications

which are primarily technical or informational.

of this truth for supervisory selection,

My plea is for us not to make this mistake.

training, and evaluation are readily ap
parent.
It should not be inferred from any of the fore
going that I am trying to play down the many
aspects of the supervisor’s job as it relates to
information, communication, and technical, op
erating know-how. The modern supervisor has
to know the bank’s policies, rules, and regula
tions; the bank’s cost system, its payment sys
tem, and its methods of appraisal and evaluation.
He should have an understanding of labor laws
applying to his subordinates. He has to know
how to induct, instruct, and train new workers.
He has to know how to prevent grievances, and
how to handle them when they occur. He has
to know how to correct workers and maintain
discipline. From these we can see that it is almost
impossible to separate his job into technical and
human relations categories. He is supervising
people, but these people are engaged in bank
operations. Just as he must know people in order
to gain their respect, so he should know the op
erations or he will not win their confidence. He is
not a Sunday School superintendent, Y.M.C.A.
secretary, college guidance counsellor, or scout

I deliberately shy away from prescriptions
concerning training programs for supervisors
because I am certain that there is no one best
way of achieving goals of individual develop
ment. Experience leads me to believe that it is
not a question of lectures, or seminars, or visual
aids, or role-playing, although under proper
circumstances these techniques have their place.
I feel that there is no substitute for the training
and development which comes from close daily
association with bosses who themselves are good
administrators— men who already have the at
tributes we have discussed, bosses who take a
personal interest in us and who take it upon
themselves to guide us in our self-development.
Actually, all development is self-development. The
only way to learn responsibility is to be given
responsibility, not make-believe, but real. Just as
great oaks from little acorns grow, so big respon
sibilities emerge from smaller responsibilities.
In learning to swim it is probably best not to
be thrown into deep water without preliminary
instruction. There is some explanation and train
ing that can and should be given on dry land.
This instruction is not limited to techniques of

master— and I say this without disparagement—

movement and of breathing. The coach must

but he is a supervisor of individuals performing

understand his pupil because his biggest problem

certain bank operations. He does not administer

may well be that of helping him to overcome

in a vacuum.

emotional problems of insecurity, anxiety, and

Your reaction should be, “ We are certainly

fear. Both the coach and the pupil know, how

expecting an awful lot from a supervisor!” Yes,

ever, that when the chips are down swimming is

we are. It is a difficult job. There are so many

learned in the water. Improvement comes with

things he has to learn and do that we have a

daily practice, in the water, under the experienced

tendency to not sell him short but “ train him

guidance of a discerning and interested coach.

short.” In doing this there is a common tendency

The way to learn swimming or golf or tennis

or supervision is to take lessons from a “ pro.”

petent. There are a lot of other things one can

Administrative competence is best learned from

do to improve his game, but there is no real

those who are themselves administratively com-

substitute for this one.

Part II: The Executive
Someone has described management succession

his boss, “ the man he works for,” and so on up

as follows: “ The president retires or dies and

the line.

creates a vacuum into which is swept the nearest
vice president who hasn’t had a coronary.”
The description, I think, implies two things:

The biggest promotional step a man takes is
when he steps out of the rank and file into his
first supervisory position. He acquires a new set

(1) succession has not been planned, and (2) the

of problems, different from those he has had

successor may not have sufficient administrative

before. No longer is he responsible just for his

competence to handle the presidency with dis

own work. He now acquires responsibility for

tinction. No doubt the same situation occurs else

the work of others whose efforts he has to elicit

where in the executive hierarchy.

and direct. That this is difficult may be inferred

Last evening we talked about acquiring admin

from an oft-repeated remark, “ It’s just easier

istrative competence primarily at the first-line

to do this myself than to get the others to do it.”

supervisory level. We pointed out, however, that

This, of course, is a confession of supervisory

the principles set forth are equally applicable to

weakness, or administrative incompetence.

higher administrative positions. In like manner,

It is in this first position that he encounters

most of the points to be discussed this evening

the problems and responsibilities of power and

are applicable to first-line supervision.
We are still talking about the boss, “ the man

authority, the need to understand employe goals,
the need to know what causes employes to col

we work for.” In addition we are talking about

laborate and to do their best work. It is in this

job that he first learns about the problem of

at all times truthful. I suspect that this is not an

earned acceptance. It is here that he demonstrates

orthodox approach to “ executive development”

administrative behavior built upon the founda

but we can forego a lot of things that comprise

tions of the basic rights of man as employe.

such programs if we can succeed in getting a man

Later promotions which place a man at higher

to engage in prayer, in introspection and self-

points on the organization chart do not cause

evaluation, and if we can persuade him to seek

him to encounter fundamentally different or

truth from best friends. A little of this is worth

unique problems. It is “ more of same.” The re

a flock of seminars. I think I am being practical

sponsibilities may be greater, the human prob

and not starry-eyed in saying these things.

lems may be intensified at times, and the stakes
may be greater, but executive problems are

What is the first thing you think of when you
hear the word executive? “ He’s an executive!”

essentially supervisory problems. Of course, exec

I’ve heard some say, “ He’s a big shot who gets

utives are supervisors. They are supervisors who

other people to do all the work, and then takes

supervise other supervisors, and get more money

all the credit himself.” The first part of this is

and better offices.

not too bad; the second is obviously to be de

The greatest danger or risk in appointing a

plored. One I like is this, “ An executive is a man

man to an executive post— and by this I mean any

who can take a two-hour lunch period without

post up the line that is generally regarded as

hindering production.” This contains an impor

being important— is that the man will change. If

tant idea, although it can also be interpreted in a

he has been selected for the right reasons then
we no doubt like him the way he is. He has been

snide sort of way. I choose to think that it means
that this man gets a lot of his work done by dele

appointed (1) because he is the kind of man

gating. So let’s talk about delegation. We may

he is, and (2) because we like the way he has
been operating up to now. This is not to say that
we want him to stop growing.

set up widely differing kinds of executive train
ing programs but, whatever the plan, we do not
neglect “ principles of delegation.”

Promotion has a way of affecting some men

I have discovered why a lot of junior officers

adversely, and it is not always predictable. If it

in banks aren’t very good executives. This is

were, one probably would not make the promo

earth-shaking, so listen carefully because I don’t

tion. A few develop overnight a superiority com

want to say it too loud. The reason is that their

plex arising from increased status and they

vice presidents don’t permit them to be good ex

become unbearably important. It is especially

ecutives. The vice presidents don’t delegate. They

during this first year of occupancy of the new

have to make every important decision them

executive position that one should include in his
nightly prayers a plea for the gift of humility. It

selves. This being the case, the first step in a
program of executive development is to work

is during the early stages particularly that he

on the development of existing vice presidents.

should continuously examine his daily life. You

I am not being facetious. Quite the contrary, I

know the expression, “ Even your best friend

am speaking with great seriousness. There isn’t

won’t tell you.” That must not be the case here.

much point teaching juniors in some training

One must insist that his best friend be especially

program how to do all the things their bosses

watchful, especially discerning, especially candid,

won’t let them do.

Delegation is not just a simple matter of giving

thing himself is temporary, illusory, and self-

a subordinate a job to do. Newman, in his book

defeating. It is bad for him, bad for subordinates,

“ Administrative Action” has described the proc

and bad for the organization. If a boss is to be

ess as consisting of three aspects:

administratively competent he must delegate.

1 The assignment of duties by an executive
to his immediate subordinates.
2 The granting of permission (authority)
to make commitments, use resources, and
take other actions necessary to perform
the duties.
3 The creation of an obligation (responsi
bility) on the part of each subordinate
to the executive for the satisfactory per
formance of the duties.1

Administration is a hollow term indeed if it does
not include this.
I am not here trying to suggest any patterned
program for training in delegation because I
know that there are numerous approaches pos
sible. I do feel that any program must:
1. Convey a sense of its importance, and
2. Portray

clearly

its nature, extent,

and

limitations.
Finally, I believe quite strongly that the way to
learn delegation is to delegate. I may add that in

Stated in simple operating terms it might go

our own bank one of the first questions we raise

something like this: Assign duties to a subordi

in appraising an officer is, “ Does he work with

nate, give him the necessary authority to carry

and through people by delegating, and do people
grow under his leadership?”

them out, and hold him accountable for results. It
is to be noted that while the process creates an

Perhaps light may be shed on other aspects

obligation or responsibility for the subordinate,

of administrative competence by citing another

the act of delegation does not relieve the boss of

question we raise. In the area of organizational

his own responsibility for the results. For exam

ability we ask, “ Does he have the ability to size

ple, my boss hands me a job, I delegate it to a

up a task, to organize, and lead others in accom

subordinate, and for some reason proper results

plishing it?”

are not obtained. My boss holds me accountable,
I am still responsible. I can’t say to him, “ Sorry,

size up.” Have you ever had experience with

my subordinate didn’t produce.” His answer

executives who can’t distinguish between a maj or

quite properly is, “ But isn’t that your problem?”

and a minor problem? They come in three vari

This is no doubt one reason, but not the only

eties: (a) those who treat all problems as major,

one, for the failure of many executives to dele

(b) those who treat all problems as minor, and

A great deal is implied in the expression “ to

gate. A boss is afraid the subordinate will not

come up with first-class results, and it is he who

every time. Any one of these is guaranteed to give

must account for results to his boss. Delegation

a supervisor under him or a boss over him an

is therefore a risk-taking process. Bosses have to

administrative pain in the neck.

assume these risks. Through proper training of

When we say that administrative competence

subordinates they are able to minimize the risks.

implies the use of good judgment we include the

The way to administrative security is through
good training and well-placed confidence. The

of importance and magnitude, relative urgency,

security which comes when a boss does every

and a sense of timing or timeliness— when action

1A d m inistrative Action, by W illia m H . Newman, Pre ntice-Ha ll.

ability to determine such things as relative order

may be taken and when it may be wiser to post

ever, that not to act is itself a decision. It too can

pone. I hope the panelists know how to work all

be wrong.

this into a training program better than I do.
I feel confident they do.

You noted above that I said “ for the moment
we would disregard all that goes into, or builds

It may seem like “ carrying coals to Newcastle”

up to, the making of a decision.” Now let’s regard

to call attention to the business of decision

it. Decisions aren’t to be pulled out of hats or out

making because, of course, this is basic to the

of thin air. Decisions stem from a man’s judg

administrative process. But then, we are discuss

ment, from his interpretation of facts, from in

ing basics rather than examining footnotes or

formation and data obtained from many sources,

mulling over the fine print.

not the least of which may be his own experience.

Disregarding for the moment all that goes into,

Cues to training may be spotted from an ex

or builds up to, the making of a decision, it

amination of the sources of information the boss

should go without saying that a decision should

may use in preparing for the decision. He learns

be made decisively. The die is cast— this is it—

much from personal and direct observation. He

for better or for worse. If it turns out badly, we

must, therefore, become a trained observer— of

do something to correct it. No decision of any

facts, events, behavior. He receives reports—

importance is riskless, and the decision-maker

from above and below; from across, thinking of

assumes the risk with confidence, boldness, cour

staff functions; and from outside. This is all part

age, or whatever it takes to be decisive. No shilly

of “ keeping currently informed.”

shallying.
There is a story about the great baseball

Many day-to-day reports are oral. The boss
has to be a good listener, and believe me this

umpire Bill Klem that always appealed to me.

takes self-control and requires training— espe

Bill responded to the question, “ Is it true that big

cially for bosses. He has to be skillful in asking

league umpires always call ’em the way they see

questions, and this too takes training. (A good
boss isn’t a man who knows all the answers; he’ s

’em ?” by saying, “ Well that may be true of most
of them, but not me. / call ’em the way they are!”

a man who asks the right questions.) He receives

I don’t believe bosses can be that good or that

accounting and statistical reports. He must, there

sure, but we certainly should call ’em as we see

fore, be trained in their interpretation— no mean

’em, and with something approaching the self-

accomplishment. Keeping informed, making use

confidence of Bill Klem. This behavior doesn’t

of many resources, both internal and external, is

have to be inconsistent with a spirit of humility.

one of the most time-consuming tasks of the boss.

It is not the way of the scientist, but it is the way

In all this I have spoken as though he is always

of the competent administrator. Scientists usually

on the receiving end. But the boss we are talking

can postpone final judgments until all the evi

about also has his boss. So he is on the sending

dence is in, and even then they come up with
guarded and tentative conclusions. Not so with

end too. If his boss is to be a good listener, he
has to be a good talker, even a persuader. He has

the boss. He often must act now, with what he

to be a skilled reporter of facts, events, behavior.

has to go on. This is why administration is so

He has to give accurate answers to the questions,

difficult. This is why mistakes are made, mistakes

honest answers. He has to be skilled in prepar

that must be corrected. We must remember, how

ing and presenting accounting and statistical

data, skilled in making complex information

of this general area of obligation requires spe

meaningful.

cialized knowledge and considerable wisdom. The

Reporting is subject to special hazards and

boss should act in accordance with principles and

weaknesses that can be overcome only when the

criteria generally understood by all. This is not a

climate is right. It is human to tell the boss only

place for haphazardness or personalizing. It pro

what we think he wants to hear. It leads to

vides no opportunity for “ playing good-fellow.”

omitting, distorting, or suppressing what he

Salary increases and promotions are earned.

ought to hear. We tend to pass on information
which is to our own credit. If decision-making in

They should come as proper reward in due
course. The boss is not doing something for his

the organization is to be first-class, the rule and

subordinates; he has continuously been helping

the practice has to be “ the truth, the whole truth,

them, guiding them, providing opportunities and

and nothing but the truth.” This is possible only
where relationships are characterized by mutual
respect and mutual understanding, and where all

setting the climate for them to effect their own
serve and evaluate their performance and reward

parties feel genuinely identified with the organi

accordingly. His is the job of seeing that each

zation— a very important cue to training.

person receives his due within the framework of

improvement. His accompanying task is to ob

We see, therefore, that administration is in

the rules of the game. While objectivity is desir

large measure a process of communicating. We

able, it probably is impossible of attainment. But

have to communicate what we are trying to do,

in no other aspect of his job does he have so

why we are doing it, how we are getting it done,

great an obligation to try to keep his biases under

and how good or bad it is after we have done it.

control. I guess that all this points to the neces

And it goes three ways— upwards, downwards,

sity for training in sound salary administration

and sidewards. We communicate not just in
formation. We communicate attitudes, feelings,

and employe appraisal or “ performance rating.”
It points to more than this. We can see clearly

motives. Motivation itself is a communicating

that administrative competence in this field calls

process, and one of the most important of mana

for the boss to have an honest understanding of

gerial responsibilities. Using the words of one of

his own motives, biases, and prejudices. I am not

our Philadelphia friends, Dale Purves,

sure that this understanding is obtained in pro

“ It seems to me to make very little differ
ence indeed whether you are running a big
show or a little show— you have to provide
effective communication all the time and it
has to be alive. And it has to make sense.”

grams of training. It may well be that the boss
has to back himself into a corner and think
through his actions, decisions, behavior, and
especially his motives— in utter solitude. Medita
tion may well be one of our best managerial
techniques.

Both last evening and this we have included in

I should now like to steer off the main course

our story of administrative competence the re

for a few moments. As you may have surmised

sponsibility of the boss to help his subordinates

by now I am a great believer in and strong

attain their objectives. Among these are the goals

advocate for on-the-job training under skillful

of more money, increased status, and promotion

guidance. I now want to put in a big pitch for

to jobs of higher responsibilities. The fulfillment

off-the-job training, particularly self-training. We

often hear it said that “ You can’t learn this or

eral management?” Is it that there isn’t time

that by reading books.” We have to agree that

for everything? Remember that boss-failure is

reading books isn’t everything— but it sure is

usually not due to technical incompetence. Most

something. I don’t personally know a single first-

failures are in the areas of personnel administra

class executive who doesn’t spend a great deal of

tion, human relationships, and general adminis

his time reading. This includes both general and

tration. Why read only in the field of our

specialized reading. Every field of human en

strengths? Shouldn’t we work on the weak spots?

deavor has a literature, some of it classic. Every

What is the answer to the question?

field also has its trash, so we should be dis

Along with reading, I place writing and speak

criminating in our selection. It may be true that

ing. How many executives do you know who can’t

not all the great ideas have been written up in

write well? How many are able to put their

books and journals, but there are a lot more of

thoughts on paper, clearly and persuasively? How

them than any of us will ever be able to use.

many of you have ever been on a conference or

A training program for executives or supervisors

convention program committee and had the job

is no substitute for a carefully chosen reading

of finding speakers for your program? Remem

program, assuming that the individual can and

ber the comments, “ He’s a good banker, but a

will think through what he reads. I would never

lousy speaker; let’s not have him.” I guess most

trust the formulation of any training program

people know a few bank executives who simply

to a man who himself doesn’t do a substantial

murder the language. Of course, one doesn’t ex

amount of good reading. Why shouldn’t those
“ in training” do a lot of the reading for them

pect every executive or administrator to stand up
on his feet and “ wow” an audience, or to be a

selves— instead of having it all digested for them

Demosthenes at the meeting of the county bankers

by portrayals on flannel boards, strip films, and

association, or to write for the Atlantic Monthly.

movies? I am not opposed to these. But my reply
to “ Book-learning isn’t everything” is, “ Neither

But isn’t it part of his job of communicating to

are visual aids.” Such aids are supposed to be,

matical English? I think it is, and I think it

and often are, aids to learning. But isn’t it often

points to something in the formulation of train

true that they are also props for the lazy?

ing programs, or just training without programs.

write and to speak in clear, effective, and gram

There is a question that I have often asked

Melvin Copeland, of the Harvard Business

bankers which I now ask you. People in the field

School, has written a book called “ The Executive

of, say, credit administration seem to believe that

at Work.” In his chapter entitled the “ Rewards

it is important to read good books that comprise

of Management” he makes an analysis of why

the literature in this field, and to keep up to

the supply of competent top executives is so thin.

date by reading the leading journals. So with

He gives two primary reasons, one of which I

trust administration, and other technical banking

think we would guess— not many people want to

fields. Yet, these banking bosses are also man

assume the risk of too much responsibility. It

agers and every one is a personnel man too. Now

doesn’t make for the most comfortable and secure

the question, “ Why isn’t it just as important in

kind of life. The second one, however, I would

the fulfillment of the whole job to be up on the

not have thought o f; and yet it is a reasonable

literature of personnel administration and gen

and fairly obvious answer. I cite it because it

suggests another facet in achieving administra

people just don’t want to. A lot of people would

tive competence. Here is what he says:

become fairly good musicians if they would

“ The first of the reasons to be suggested
is the dearth of men with multiple track
minds, men who can switch with facility
from one problem to another and still main
tain a reasonably high batting average on
the variety of decisions to be made. Lower
in the ranks it is difficult to find men with
even two-track minds.”

weather the first-year ordeal of practicing their
scales. Too many are discouraged by the hurdles
of the early stages. Of course it is true that some
have greater innate talents than others, but it is
also true that some of the less talented become
pretty good players because they aren’t afraid to
work. So it is in achieving administrative com
petence.
In drawing to a close I should like to set forth

Problems just do not come to the executive one

what I believe to be some of the essential and

at a time. His way of working cannot be that of

desirable characteristics of business leadership.
These beliefs are drawn from personal observa

coping with one problem until it is solved, then
moving on to number two to its solution, then to
number three, and so on. He has to juggle a

tion. My working hours are spent in a fairly large
organization, and from where I sit I come to

number of balls in the air at one time. Typically,

know a good number of men who play important

he has to stop in the middle of one problem,

roles in our economic and business life. I have

tackle a new and more urgent one that has just

often asked myself, “ What is it that these men

come in, solve it, and go back to the first one.

really have?” Here are my conclusions.

His problems cover a wide variety of fields. One

The first is technical competence, a term which

minute he is considering a loan application, the

covers more territory than appears at first blush.

next minute he is faced with an urgent personnel

The executive is usually competent in one or

problem involving a member of his staff. He then

more specialized fields. In the plying of his own

looks at his watch only to note that he is due at

profession he is “ good in his own right.” In the

a group conference to consider the purchase of

heading of an organization, however, he demon

some new business machines. Meanwhile he has

strates his recognition of his own strengths and

answered three telephone calls, including one

limitations. He realizes that the organization is

from his wife asking the whereabouts of the car

too complex for him to be able to excel in all the

keys. This is no job for the man with the one-

fields which enter into the business. Therefore,

track mind. This is no job for the man who

he selects and trains capable subordinates, and

believes one can work on only one problem at

really delegates. His big task is in the field of

a time. It is no job for the man who can’t cope

planning and coordinating and controlling the

with variety, who can’t change his pace, who

activities which comprise the business. This is all

can’t stand up under the pressure of quick

part of technical competence.

changes of scene. It is my view that a man can

Second, business leadership calls for a broad,

learn to juggle balls in the air. But he has to be

intellectual outlook. We have passed through an

interested, he has to have a will to do it, and he

extended period in which businessmen have

has to practice. He must remain patient, believ

placed primary emphasis upon technical compe

ing in himself, “ Even this I can learn.” Most

tence. They have looked for trained men rather

than educated men. But today they are becoming

all leaders have to excel, or sooner or later fail

increasingly convinced that tomorrow’s leaders

to retain their positions of leadership—-the field

must come from the ranks of educated men. We

of human relationships. The great problems of

could spend a great deal of time describing what

the age— international, national, and corporate—

companies are doing to awaken and develop the

have to do with the relationships of people. There

intellectual and spiritual powers of young-comers

can be no peace among nations, no political peace

so that they will become, in the words of John

at home, no industrial peace, without the coop

Stuart Mill, “ capable and cultivated hu
man beings.”

eration and collaboration of men of good
mk

will. Securing the cooperation of men of

Third— and here we move into the

diverse interests requires the exercise

field of moral values— I have observed

of the highest kind of social skill. It is

that the most admirable and the most

the skill which, perhaps more than others,

effective business leaders are men who
have a highly developed sense of honor.

is the distinguishing characteristic of the
business leader. This skill, however, is

They do not lose sight of moral and

almost certainly impossible of attain

spiritual values in their business life; in

ment unless it rests upon a foundation

fact, they are motivated and guided by

of the other qualities and accomplish

them. We may be cynical and point to

ments which I have enumerated. What

some who are selfish, unscrupulous, even

are they again ?

crooked. These are “ lesser men” and are so re
garded by all clear-thinking individuals.
Fourth, and related to the previous point, is
the business leader’s concern for the public in
terest. The corporation executive whose philoso
phy is “ the public be damned” is today a rare
bird. In the first place, it simply isn’t a workable

1 Technical competence.
2 Broad intellectual outlook.
3 High sense of honor.
4 Attention to the public interest.
5 Understanding and appreciation of hu
man relationships.

philosophy in this day and age— if in any age.

There can be little progress in the achievement

More important, however, is that the business

of administrative competence unless it is made

leader today thinks and works in the public in

along all five of these lines. These are the stars

terest because he feels it is right to do so. The

to which we must hitch our wagon. Difficult, of

days of the publicly irresponsible executive are,

course. But we should be encouraged by the poet

if not over, at least numbered.
Fifth, we come finally to the field in which

Robert Browning, who says to us: “ Ah, but a
man’s reach should exceed his grasp.”

Full text of Business Review (Federal Reserve Bank of Philadelphia) : December 1958

FRASER