Personnel

Last week the following were news:

Among post-NRA expedients of the Administration which make Hugh Samuel Johnson hot under the collar is the undistributed profits tax. Wrote General Johnson in his Scripps-Howard column last month: "I know a small company that was started with adequate capital in 1929. The crash hit it just as it was getting under way. By some miracle of management it was kept alive through the long valley of the shadow of industrial death from 1929 to 1935. ... In 1936 for the first time it made money--enough money to pay off its debts. Can it do so? On its life it cannot. If it did the new law would assess on it a confiscatory tax almost as large as its debt, and that would bankrupt it--prosperous though it now is. . . ."

The company in question was one that Hugh Johnson knew very well indeed for the simple reason that he was its president until a year ago, has been board chairman for several years. It was named Lea Fabrics, Inc. after its onetime president and General Johnson's great friend, Robert WT. Lea. Lea fabrics is a $1,500,000 company with a plant in Newark, N. J., where 20 employes turn out automobile carpets for General Motors, Chrysler, many another motormaker. Last week a letter from Chairman Johnson outlined for Lea stockholders the difficulties their company was in as a result of the undistributed profits tax:

"It is impossible at this time to state accurately the net earnings of this corporation for its fiscal year ending May 31, 1937, and consequently the amount of this surtax, if no distribution is made by the corporation during the fiscal year which is taxable to the stockholders as such, is estimated to exceed $20,000. A serious situation has thus been created because of the relatively small amount of cash in possession of the corporation. This shortage . . . is due to prudent anticipation of raw material requirements, and while this anticipation, coupled with temporary stoppage of shipments due to automobile strikes, has resulted in a greatly increased inventory ... it has also resulted in the corporation being without cash funds either to pay a surtax or to pay a dividend in cash."

Chairman Johnson's solution, on which stockholders will vote at a special meeting next week, is the declaration of a dividend of $1 a share on each of the company's 102,000 shares of capital stock outstanding, to be paid in 5% convertible debentures maturing in 1947.

P: Believe me when I tell you that an executive of a big corporation burns up about two years of his life every twelve months," said black-browed President James Dinsmore Tew of B. F. Goodrich Co. Mr. Tew was speaking in Akron at a meeting of the Twenty Year Service Club of Goodrich employes. Because Mr. Tew has long been known as one of the hardest-working executives in Akron, he was readily believed, readily understood when he announced that he was retiring as active head of the great rubber company at the age of 55.

Jim Tew went to work for Goodrich in 1906 without taking the trouble to remind his employers that he was a nephew of the founder and that B. F. Goodrich Co. had once been known as Goodrich, Tew & Co. His first job was to clean and roll liners at 15-c- an hour, ten and a half hours a day. When his boss told him two years later that $75 a month was his limit, young Tew walked over to Diamond Rubber Co. and got a better job. The first successful cord tire made in the U. S., Silvertown, was produced by Diamond as a result of a study Tew made in England of the Palmer cord tire process. In 1912 Goodrich and Diamond merged and Jim Tew began the climb that landed him in the presidency in 1928.

Elected Tew's successor at Goodrich's annual meeting in Manhattan last week was Samuel Brown Robertson, 59, who went to Goodrich in 1919 after 20 years as a supervising engineer for Pennsylvania Railroad. As director of engineering for the rubber company, big, husky Sam Robertson built the $4,000,000 Goodrich plant at Los Angeles, which is considered a model in the industry.

P: The Lehigh Valley Railroad, whose 1,300 mi. of track in Pennsylvania, New York and New Jersey run through some of the finest scenery and richest anthracite resources in the U. S., received 26% more from coal shipments last year than in 1935. Since the Lehigh is primarily a coal-carrier, this meant Recovery. With coal & steel booming on merrily, last week rugged Edward Eugene Loomis, president of the road for 20 years, retired to become board chairman. Elected to succeed him was Scottish-born Duncan John Kerr, a rail-road man since 1904, when he arrived in the U. S. with a degree in engineering from the University of Glasgow. With Great Northern Ry. from 1910 to 1936, Mr. Kerr was assistant to the vice president in charge of operations and president of coal and lumber subsidiaries in Montana when Mr. Loomis hired him as his assistant last year. Reserved, 53-year old President Kerr lives in Manhattan, enjoys most "just being in Montana."

P: One of the most vivid memories of Robert House Colley is that of ripping off rapid-fire calculations for Battery A of the 307th Field Artillery during the battle of St. Mihiel, standing behind some ruins with rain pouring down on his maps and tissue paper tracers while a private tried ineffectually to hold a pup tent over his head. Second Lieutenant Colley retained his passion for mathematics, returned from the War to put it at the service of finance in the treasurer's office of Philadelphia's Atlantic Refining Co. Last week, on the retirement of William Mitchell Irish, shy, precise Mr. Colley became Atlantic Refining's new president.

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