Sam Ferguson Looks Ahead

New Englanders remember 1920 vividly. The memory did not prevent them from turning their skill to guns again in this war, but it did cause the farsighted ones to calculate how another post-war deflation could be prevented. In all New England, there is no more farsighted businessman than Sam Ferguson, boss of Hartford Electric Light Co.

Months ago Mr. Ferguson decided that U.S. employers should "grab the ball from the New Deal" and care for their own unemployed after the war. To Secretary Morgenthau he proposed that the Treasury offer $500 certificates for sale to war employers. Employers would buy one certificate per year for each employe in excess of the number on the payroll June 30, 1940. Thus three years of war employment would provide about $30 a week, for one year, to each surplus war worker.

The plan would be voluntary; employers would contribute the whole fund; and the Treasury would get the money now, when it needs it. The plan also included a neat inflation brake: although there would be no deduction from current wages, 75% of all wage increases would go into the fund, to be paid when the certificates are cashed after the war. Mr. Ferguson disclaimed knowledge of J. M. Keynes's wage-deferment plan in England, to which his project bore a striking resemblance.

Since the deferred-wage certificates would be part of the employer's wage bill, they would be deductible from taxable corporate earnings. That was why the Treasury turned it down.

But Sam Ferguson still thought his plan was good. He has a little subsidiary (200 employes) called Hartford Electric Steel, which not only makes castings for Navy submarines, but has long been a laboratory of labor relations. When C.I.O. organizers came to Hartford a few years ago, the steel workers asked, and got, a promise of 1/3 of the monthly profits --and the organizers went away. Hartford Electric Steel profit-sharing now amounts to a tidy $40 per month per employe. Last December Sam decided that Hartford Electric Steel was a good place to try the Ferguson post-war wage-cushion plan.

The men contribute 1/3 of their monthly profit-sharing to a Separation Wage Fund, matched by a 2/3 company contribution.

The company intends to pay each employe his 40-hour-week base wage (minus any other income received) for 52 weeks after he is fired.

Separation wages are merely the latest front on which Sam Ferguson, 68, implements his faith in progressive private enterprise. A pioneer in low utility rates, power pools, the mercury turbine, many another social and technological change, he is a Yankee individualist who also knows what year it is. Last month he told his stock holders that Hartford Electric Light Co. would have a new policy for the duration : "to increase the amount of earnings to be converted into taxes." That meant fewer reserves, no additions to surplus. But not even unorthodox Sam Ferguson wants to go broke paying taxes and shoring up the post-war world. If the Treasury says that company contributions to his Separation Wage Trust are nontaxable, the plan stands: otherwise it is all off.

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