Needed: More Help from Corporations

_BUSINESS & THE COLLEGES.

As every schoolboy knows, the important raw materials of industry are coal, oil and iron. But, as every businessman knows, the most important raw material of all is the schoolboy who, as a trained college graduate, will run the U.S. industry of the future. Today, U.S. industry is faced with a tight shrinkage of such manpower; it needs not only more but better trained college graduates.

To help get them, many a businessman believes that corporations must

1) provide much of the cash needed by colleges to expand their facilities and improve their teaching, and

2) work more closely with colleges on business' needs. As Robert R. Young pointed out at a White Sulphur Springs conference of businessmen and educators, industry and education have a clear mutuality of interest.

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Businessmen and educators have not always recognized this. While there are a few businessmen who still regard college professors as fuzzy-minded and likely to be radicals, and a few educators who still look on businessmen as mere moneygrubbers, the mutual distrust has generally disappeared in the mutual need. The rapidly expanding U.S. economy has made college graduates more important than ever to industry. In turn, universities must depend increasingly on corporations for contributions, since high taxes have all but cut off the flow of the big individual contributions that built the private schools.

Few people know how much industry already contributes. In 1954 business will donate well over $60 million to private U.S. colleges, plus additional funds for research and equipment. Du Pont will parcel out more than $700,-ooo, most of it for chemistry students and research. Union Carbide has gone even further. It is planning a $500,000 program which will eventually provide 400 scholarships a year for more than 30 colleges to administer without strings of any kind.

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But even this help is not nearly enough. The U.S. private educational plant is in financial trouble. An estimated 50% of the private colleges operate in the red. At present, a large amount of corporate help covers just tuition, about half the cost of putting a student through school. Educators are also concerned about the sporadic nature of donations--a flood in high-profit years, a trickle in bad. Furthermore, too many contributions are donated for specific scientific projects which tend to unbalance the college as a whole by building up one department at the expense of the others. Universities need unrestricted funds.

Businessmen themselves are not happy with the results of heavy specialization. They have found that engineering graduates are often so unschooled in the humanities that they talk and write badly, have not the wide background needed to become executives. Says A. A. Stambaugh, board chairman of Standard Oil of Ohio: "Real leadership is compounded of the broadening cultural influences of liberal arts colleges. Industries have lots of men worth $10,000 a year, but can't find many worth $100,000."

But while businessmen recognize the dangers of overspecialization, they have been reluctant to commit their firms to large-scale support of the liberal arts, partly because they have feared stockholders' suits over college contributions that did not have crystal-clear benefits to the company. This worry was lessened only 2^ months ago when the New Jersey Superior and Supreme Courts both rejected, and the U.S. Supreme Court refused to review, a stockholder's suit against the A. P. Smith Manufacturing Co. The stockholder claimed that a $1,500 gift to Princeton University for general education purposes was illegal because there was no direct benefit to the corporation. Ruled the court: "What promotes the general good inescapably advances the corporate weal."

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U.S. business is taking the lesson to heart. Corporate gifts are not regarded merely as a means of spending cheap tax dollars, but as a blue-chip investment that will eventually pay heavy dividends. Some 1,500 companies have learned that the best way to give is through corporate foundations, such as U.S. Steel set up only three weeks ago. By investing heavily in periods of high earnings, a backlog can be accumulated to insure a steady stream of funds, thus enable educators to plan years ahead. But corporations still contribute far less than they are entitled to by law as a tax deduction (5% of their net income). In urging them to give more, Irving Olds, former board chairman of U.S. Steel, said: "Every American business has a direct obligation to support free, independent, privately endowed colleges in this country to the limit of its financial ability and legal authority. And unless it recognizes and meets this obligation, I do not believe that it is properly protecting the long-range interests of its stockholders, its employees and its customers."

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