Saturday, November 14, 2009


“I am taking part of my lunch hour to write you a letter. My telephone has been busy all morning, telling me of the increasing demoralization of business and industry and the crumbling of all commodity and security values to absurd levels. Unemployment is growing rather than diminishing and manufacturing plants of every character are facing either drastic curtailment or shutdown. All these matters raise very serious problems affecting the economic structure of our country and the world and with them must necessarily come problems which have grave consequences upon the social fabric. There are now relatively few rich men left and that select and limited group find the value of their accumulations shrinking daily and the prospect of tremendous income and inheritance taxes imminent.

I tell you these things first, as a matter of general business information and second, so that you may consider them as factors in the working out of your own program of life and philosophy.

Civilization has previously gone though major depressions both ancient and modern. We had four or five hundred years of depression in the Dark Ages, after the fall of Rome and since the advent of the modern industrial age, immediately following the Napoleonic Wars, we have had two or three periods of deflation probably as bad as anything we have gone through thus far. Nevertheless, it may be a long time before we return to the standards of the Golden Age, the decade which followed the World War. The men with the best training, serious purpose, dependable character and a capacity for hard work will have the best time in our lifetime, at least.

You must realize and I believe you do, that you have passed out of the college boy phase and atmosphere and are no long justified in regarding yourself as a playboy. I am of course, disappointed that you are not to have the experience in Labrador, with its combination of service and contact with that “primitive life” which prevails on the vast majority of the Earth’s surface.

If will be a misfortune if you do not have some definite experience with that kind of manual labor by which most men live. You will not understand your fellow man or be able to lead them unless you have a sympathetic viewpoint based on experience. I spent at least three summers working on your great grandfather’s farm, between the ages of fifteen and eighteen and I am glad that I did. A hayfield is a good test of mental and physical guts on a pleasant August afternoon…likewise, the potato patch and the long rows of corn where the weeds flourish. Wrestling with a tumbled-down stone wall involves a resistance fully as stiff as anything you can get out of the young gentleman from Tufts. All your ancestors have wholeheartedly contacted the handles of both a hoe and a shovel.

Mr. Wyman (Walter S. Wyman, then President of New England Industries) who is recognized as the outstanding business man in the state of Maine, tells me that when his son was graduated from Harvard, he got a job with a road gang and swung a pick for six months, when he was promoted to foreman of the gang, wholly without any assistance or influence from his Father. I think that pleased Mr. Wyman more than anything his son has done subsequently.

Mr. Wyman has a very large farm at Winthrop, Maine. He employs about thirty men. He told me that if you wanted a job on this farm, he would be glad to give it to you. I don’t know of any other job available. It is possible that I could ask some textile friend to give you some apprentice job in a textile mill, but I don’t think you would find it as agreeable as outdoor work - or as beneficial. Bobby Goddard is going to work for a month in one of our mills in Maine in the city of Lewiston and while I believe you should be anxious to have some similar experiences later, I would not recommend it for this summer, unless all other possibilities fail. If you wish to spend one month of the summer at military camp, I certainly have no objection but I think you will agree with me that the time has gone by for playing the young gentleman of leisure in any fashionable watering place until you can do so on your own.”

When I first read this letter a couple of weeks ago I realized that it could have been written with a few tweaks here and there and in a more contemporary style to represent reaction and analysis of the most recent downturn in the US and world economies. In fact, this letter was written on May 4, 1932 when the United States was in the midst of an even greater financial crisis precipitated in part by overheated, overvalued markets, the subsequent Great Crash of 1929 and the policies (some say wrongheaded) of the Hoover and Roosevelt administrations. Yes, there’s a lot of controversy about those policies… Whatever your perspective, the United States and the World were in desperate straits in 1932.

The taxes the author of this letter was referring to were the huge tax increases precipitated by the Revenue Act of 1932 which raised income tax on the highest incomes from 25% to 63%, doubled estate taxes and, likewise, raised corporate taxes by almost 15%. Believe it or not this act even included a "check tax" that placed a 2-cent tax (over 30 cents in today's dollars) on all bank checks. Many feel that ill advised fiscal policies like this stifled investment and helped to further deepen the depression with most conceding that this was a herculean bipartisan effort.

Whatever the origins, it caused a continued panic among the most wealthy in this country and what was left of their money wasn’t looking for opportunity, rather preservation. History confirms that the S&P 500 bottomed in mid-1932 and then like the phoenix soared nearly 75% in the next three months though basically went sideways thereafter for almost a decade. We know now with our capacity to look backwards that the Great Depression did not technically end until 1941 and the start of World War II giving further credence to the fears and counsel of the writer of this letter.

In keeping with that most popular Bing Crosby 1932 song of the year, Brother, Can You Spare A Dime?, 24.9% (12M+ unemployed) of US workers in a labor force of 51,250,000 (total population of 91,810,000), put that scenario in a much darker context given our recent and seemingly more mundane excursion to just above 10% where 15.7 million (M) are unemployed out of a total US labor force of around 154M (US population - 308M). Still impressive numbers but it all points out that we have been here before and will surely be there again.

The writer wasn’t as enthused as an ill-advised Hoover who communicated to businessmen in 1932 his confidence and assurances that the depression wouldn’t last and that, "Prosperity is just around the corner." Hardly anyone believed him and Franklin D. Roosevelt’s 1932 landslide presidential victory (472 to 59 electoral votes) confirms that most voters felt that Hoover’s approach was, “too little too late".

The author of the letter was my Grandfather, Colonel G. Edward Buxton, Jr, and the recipient was one Coburn Allen Buxton Sr., his son and my Father who was then a student at Babson Institute in Wellesley Hills, MA, near Boston. Yes, Colonel Buxton was the same Man who offered his sage (as he put it “Dutch Uncle”) advice and counsel to one Sergeant Alvin York prior to his heroics. His words then and those above are timeless and hopefully not wasted as they apply equally to the current generation of young men and women. Colonel Buxton put his Brown/Harvard learning and work experience on the line, always worked hard and walked the walk.

By the way, the reference to the stiff resistance of the young gentlemen from Tufts alludes to my Father’s participation on the Babson Varsity soccer team (aye, The Beavers). Tufts College (now University and home to the remains of Barnum’s Jumbo the Elephant) was then, as now, a traditional and formidable adversary in athletics.

Though his business reputation had been honed and polished as a journalist and newspaperman with the Providence Journal, the textile industry beckoned and Buxton assumed senior management responsibilities (VP and Treasurer 1920-26, President 1926-1935) with the new B. B. & R. Knight Co. which at one time with 22 mills, was the largest producer of cotton products in the world. With headquarters in New York City, they owned many textile plants and brands in New England to include Dan River and the still famous Fruit of The Loom labels, among others.

Colonel Buxton, even as a national depression loomed, was elected President of the National Association of Cotton Manufacturers on October 28, 1927. He assured and prepared the 500 delegates of that body’s annual convention, thusly.

“Today finds us working and planning to meet changing conditions. To the utmost of our abilities, we are adapting our equipment and organizations making them more flexible; endeavoring to create better methods of merchandizing; getting in closer touch with our markets; recognizing the consumers demand for individuality and personality and style and beauty in color and outline and weave and standards of quality. Such changes come about very gradually, no matter how great the energy behind them.”

Of course, the Great Depression followed and prompted the steep fall of cotton prices that further rippled into a general industrial malaise that contributed to reduced consumer spending and confidence in the economy. Sound familiar? The special significance of Buxton’s contribution during this period was that he cajoled, educated and then successfully managed/guided Knight and other companies with a minimum loss of facilities and the preservation and maintenance of thousands of jobs. Buxton’s focus was always the preservation and integrity of American industry and the status of each and every worker. He understood that the individual worker was the backbone of our economy. His effort was courageous and heroic and he was rewarded with continuing and ever increasing management responsibilities.

From 1932 to 1939 while still president and later Chairman of the Board of B. B. & R. Knight Co, Buxton was elected president of a group of five Maine textile plants to include Androscoggin Mills, Bates Manufacturing Company, Edward Manufacturing Company, Hill Manufacturing Company and York Manufacturing Company, all owned by New England Industries and affiliated with the New England Public Service Company. His Friendship with Walter S. Wyman, President of New England Industries pompted the “Maine” remarks in his above letter.

Buxton successfully guided Knight and those Maine mills through the maelstrom. Following the end of that assignment in Maine, the Lewiston, ME Journal reflected that, “Colonel Buxton had come to Lewiston in the depths of the depression, in trying days and times that have left their mark indelibly. Colonel Buxton’s efforts were heroic in keeping the mill wheels turning and in promotion of their products. He was genuinely interested in the civic problems in the cities where the mills were located and understood the meaning of good will.”

Would that we had more astute Colonel Buxtons who could actively counsel and advise us to keep our attention on our narrow but necessary path. Given all the current distractions, maybe we should require at least one year of mending stone walls and manually tending the fields in the hands-on Amish style? The activities which require contact with the handles of both hoe and shovel (no harrows, please!) are builders of integrity for the young men and women who will ultimately lead our country. Engaging the “primitive life” will allow for the best training and definition of serious purpose – where they can develop a dependable character and a capacity for hard work. Aye, those who successfully find and “negotiate that course will have the best time in our lifetime, at least.”

All too often folks in the 21st century want to transition from classroom to boardroom with no real training or seasoning – that incredibly naïve immediate gratification thing. Earn your degree, have a plan and then follow it. Yea, this is basic stuff. Your degree may open doors, but from there the real work starts. Earn the attention and respect of your fellow workers many from different cultures by mastering your tasks (however mundane), achieving your goals and work objectives by contributing and performing at the highest level. Be a great communicator, facilitator and build consensus for your tasks and perspectives. Understand that all jobs are important and significant to a healthy organization. The chairmen of my last two major employers started working in their respective companies as a mail clerk and retail representative. Example set.

So, Ladies and Gentleman of the future, plan well and note that the advice offered herein is still valid. It may very well be that given the current conditions all of us, young and old, will ultimately head for the fields with hoe and shovel in hand. And Me? I think I'll head for Labrador.


Ned Buxton

No comments: