Evening star., 1936-12-27
BUSINESS CHANGES SHOW
NDIVIDUALISM is LOSING
System as Whole Can Be Saved ONLY bv
Sacrifices in Part, Under Various
Legislation Forms.
BY MARK SULLIVAN.


BY MARK SULLIVAN.
HARTLY as . result Of the social
- security law which goes into
effect next month, partly Is .
. result Of other legislation, .
quite striking change Is taking place
in q considerable area of American
business. It has not been much OBJ
served. It Is one Of those indirect ef-
fects Of legislation which can be as
definite as the direct enects-efiects
which are not anticipated when the
legislation Is passed, and not noticed
until the process Is well under way.
The social security act puts q ma
terially heavier tax on large busi-
nesses than on small ones. In many
States the line Is drawn between busi-
nesses having eight or more employees
and businesses having less than eight.
In such States businesses having less
than eight employees pay only the tax
to provide old-age insurance, and do
not pay the tax for unemployment in
surance. Businesses having no en-
ployees, that Is. one-man businesses,
pay neither the old-age tax nor the
unemployment one.
The difference, for example, be-
tween = great Oil corporation and a
one-man filling station is that the
corporation will ultimately pay 6 per
cent of its payroll as q social security
tax. while the one-man filling sta
tion pays no social security tax at all.
The difference Tin some States) be-
tween q business having eight en-
ployes and one having seven is that
the former will pay per cent, while
the latter will pay only 3. Where there
Is competition between q business 41av-
ing more than eight employees and one
having seven or q one-man business.
the margin OF taxation running against
the larger business may be a material
advantage to the small business and
. corresponding disadvantage to the
large one.
Changes In Corporations.
Some large corporations, taking ac-
count Of this new tax (and also of
certain other legislaton), are mate
rally changing the basis upon which
they do business. Some businesses
which in part or In whole are on q
Chain" basis, such as large oil COM
panies that own widespread filling
stations, are going out of the retail
business. They are selling their filling
stations to the men who formerly op-
Grated them as employees.
It may be that the social security
law alone would not have brought
this change about. But previously
and comparatively recently about
20 States have enacted laws directly
aimed to break up the Chain" form
Of business. They do this by means
Of . graduated. discriminating tax.
In Texas, for example, the tax runs
from 81 . year on one store I'D to
$3.50 . year on each store above so
under one ownership This legislation
Is consciously intended to break up
the Chain" system, to bring about
individual ownership Of various kinds
Of retail business.
These laws are having q considera-
bic effect. Some oil corporations have
actually begun selling their local I'LL
ing stations. I have heard of no chain
grocery system which Is actually SELL
ing. Apparently the grocery chains
are 50 much more economical and ef-
f1ciently managed that they can pay
the discriminating taxes and still sur
vive. But grocery chains, because Of
the law, follow policy of not adding
to their number. The whole result is
that the area of business covered by
large corporations Is diminishing;
the area Of small. independent owner
ship Is increasing.
Defending Individualism.
In the increase Of small, independ-
ent business, as against large cor
porate business Of the chain type, lies
some light for the many persons now
considering the future of the Repub-
lican party.
For the moment let us consider the
Republicans as the conservative
party: conservative. that is, in a par
ticular sense-conservative in the
sense OF wishing to preserve individ-
ualism. The phrase often used is
preserve capitalism" But capitalism,
so-called. is merely . phase Of indi-
viduaIism.
The thesis of American conserva-
tives, properly stated, is that they
wish to preserve individualism as
against State collectivism, as against
State socialism. In an individualist
society, such as America has been,
one right Of the individual Is to earn
money, to save some Of it, to acquire
property with the savings, and to be
safeguarded in the possession Of that
property. This latter is capitalism
and capitalism, thus seen, Is merely
one aspect Of individualism.
In . society thus conceived the
larger the number of individual own
ers Of property, the safer such q So
ciety Is. Whenever property owners
become too few, and non-property
owners too many, the individualist
conception Of society becomes less &C.
ceptable, the collectivist form more
tempting. Consequently, any ten
dency which increases the proportion
Of property owners is, from the con-
servative point Of view. desirable.
In the New Deal there are at least
two such tendencies. Just what the
New Deal is Is not easy to say; for
the New Deal g q whole contains
some features pointing toward collec-
tivism, other features pointing toward
restoration of American individualism
to more healthy basis. Some parts
Of the New Deal are in head-on COL
hsion with other parts. As o whole,
it makes no consistent pattern.
But at least two features Of the
New Deal make for strengthening of
individualism. One is the proposal,
which the coming Congress will un-
doubted1y enact, to increase the num-
Der Of farm owners In the country,
to decrease the number Of farms
owned BY tenants through Q method
by which the Government win help to
finance tenants who wish to become
farm owners. The other consists of