Facing Reality

Presented to the Georgia Chamber of Commerce Executives Association

Sea Palms

July 23, 1971

By

Harold A. Dye, Deputy Director

Georgia Department of Industry and Trade

 

I am pleased to be here to talk to you today. In the first place, it is great to be down here at Sea Palms, where I have enjoyed being with each of you. In the second place, I think this organization has as much to do with the total development of Georgia as any other organization in the State.

 

Since this is such a vital organization to the State, and, since I know each of you and you know me, I feel that I can talk to you without pulling punches and can put the facts on the line where we can look at them, and without being overly emotional, determine whether or not we are moving in the right direction.

 

I'd like to do this in a rather unusual way. I'd like to first tell you a few things that are being done and give you the results of these things. The unusual part is that I want to repeat a ten-minute speech that I have given at conferences all over the State. So for a few minutes, you won't be hearing anything new.

 

As you know, the Governor had established a Goals Program for Georgia. He is seeking direction for Georgia and wants that direction to come from Georgians at all levels.

 

The Governor has started a strong information program. To get the information to Georgians, conferences are being conducted in each APDC Area. A workbook has been printed which is filled out at each of these meetings. So far, several thousand workbooks have been completed and turned in to the Planning Bureau for evaluation.

 

There is a section in the book on Economic Development. In this section, questions are asked that should stimulate thinking about economic development. When answers are evaluated and tabulated, goals should be forthcoming. Obviously, the answers are keyed to the discussion questions and to whatever presentations are made to explain the questions.

 

There are also sections in the book on the other seven goals' areas – education, transportation, natural environment, etc.

 

On Page 41 under Natural Environment, there is a statement, "In order to deal effectively with pollution problems, the State may have to discourage population and economic expansion." This statement is to be given a priority in development of Goals. From what I have seen, a great number of people are giving the question a very high priority and this is only a sample of what is being thought, said, and written in Georgia today.

 

You also know from what you read and hear that "industry has been a scapegoat in the pollution question."

 

At these Goals meetings, in my 8-10 minute presentation on Economic Development, I have been attempting to show the value of industrial development to the State so that anyone giving a priority to the question of curtailing industry will at least know what will be lost, and what will happen to our State.

 

Let me give you that speech right now.

 

Economic Development in Georgia is closely related to the other eight Goals programs. It crosses the line of education; it crosses the line of parties; it crosses the line of race and sex and it even crosses the line of relative income. In other words, economic development affects us to a vital degree. Let's examine this point for a moment.

In 1930, the per capita income in Georgia was $340. In that same year, the United State average was $700. Now it doesn't take much figuring to realize that $340 is less than %50 of $700; so for every dollar that we could spend in Georgia in 1930, the rest of the United States has over $2.00 to spend. It meant that the rest of the United States has a better purchasing power and a better tax base and in effect, was twice as well off as we were in Georgia.

 

Our low per-capita income had a decided effect on everything we did in Georgia. We had poor road and poor health facilities. We had poor institutions for the correction of our mental problems, and our jails were full. We had no State parks and our streams ran red with top soil. Our infant mortality rate was the highest in the United States. We had pellagra, malaria and hookworm. We were poverty stricken and were losing our bright minds to some place that offered more. We, individually, and as a state, were really hurting.

 

In 1930, we spend a greater percentage of our tax dollar on education that any other state in the United States. Now, I said a greater percentage of our tax dollar went to education in Georgia in 1930 than any other state in the United States, yet, only Mississippi, Arkansas and South Carolina spent less actual dollars per pupil. We were at the top in percentage, but near the bottom in real dollars. Even though we had the desire to educate our children as indicated by the fact that we were putting a greater percentage of our tax dollars into education than anybody else in America, we could not establish a real educational system.

 

But things have changed. In 1970, the per-capita income of Georgians was over $3,250, a gain of almost 1000% between 1930 and 1970. That's almost $3,000 more to spend this year by each Georgian than in 1930, and instead of being less than 49% of the national average, we are now over 83%. What a gain! But we still have 17% to go to be even with the rest of the United States.

 

Things did change, and are still doing so – but why?

 

Why did it become possible for us to finance schools and roads and hospitals and almost everything that makes like a little better? It was possible because between 1930 and 1970, we went into the manufacturing business along with our agricultural business. Let me repeat that – it was possible because between 1930 and 1970, we went into the manufacturing business along with our agricultural business.

 

Certainly a statement like that needs to be explained.

 

There are only two ways to produce wealth in America today – only two ways in the world for that matter – one is by the production of raw materials, that is – cotton, peanuts, soybeans, cattle, hogs – whatever you want on the farm; the mining of minerals, and the production of forest products. If, for example, you plant a seed which produces fifty- or one-hundred-fold, you have produced wealth.

 

The second means of producing wealth is by manufacturing. You take a raw material and with man-power and machinery, change that raw material in some way so that the finished product is more valuable than the original material.

 

In 1930, and for a hundred years before, we used only one means of producing wealth in Georgia. Except for a few factories here and there to produce textiles, we produced only raw materials.

 

Therefore, our economy was strictly tied to whatever profit could be made from the production of raw materials. And that was not much. Raw materials in 1968 sold at an average price of approximately 15 cents a pound. Last year, the price was approximately the same. That's the average sales price throughout the world and it includes all raw materials – gold, diamonds, cotton, coal, oil, iron, cattle, gravel, and all others. The profit potential from the production of a pound of raw materials, like cotton, is and has been very limited. In 1930, a profit potential was almost non-existent.

 

But, in 1970, we were producing manufactured goods. Manufactured goods sell for an average price of 65 cents a pound. When you bring raw materials at 15 cents a pound in one door of a factory, and there, in the factory change the form of the raw materials so that you can sell the manufactured goods at 65 cents a pound at another door of the factory, you have created wealth and have a much greater profit potential.

 

Now, let me bring the problem home to you in a different way. Suppose that in Georgia, every hour for this whole year, we produce a million pounds of raw material and sell that million pounds outside the state. We take in $150,000 per hour. At the same time, we go outside the state and every hour we buy a million pounds of manufactured goods for use within our state. That costs us $650,000. Obviously, we lose 50 cents on every pound in this transaction, for a total loss to Georgians of one half million dollars each hour. No state could have a viable economy for very long if that state sold only raw materials and had to buy all or most of the manufactured goods used. The balance of payments would be intolerable and would soon make that state a debtor to other states. The surprising thing – or perhaps it's not so surprising, is that in Georgia, we did this almost exclusively until the 1930s and we are still doing it in many areas of the state and on many of the products we use. We sell raw materials cheap and buy back the manufactured product dearly. We sell peanuts at 15 cents a pound and buy back peanut butter at 65 cents a pound. We export over 90% of our peanut crop in the raw material form – the 15 cents a pound form. We really make money for people in Hershey, Pennsylvania and Chicago, Illinois.

 

If we were to lose like that on all our raw materials and not compensate with manufacturing, we would never be able to reach a "state" favorable trade balance. We had an impossible capital outflow in 1930, but are now approaching a balance. When we do reach a favorable trade balance, we will at the same time, reach and pass the national average of per-capita income.

 

Trade balances also apply to counties as well as states and nations. Counties producing only raw materials are faced with the capital outflow problem and a lower per-capita income. They cannot pay for the things that make the county prosper. Did you know that the county in Georgia with the lowest per-capita income has no manufacturing? The county with the second lowest has no manufacturing and so on until you reach the counties with the most manufacturing, where you find the highest per-capita income.

 

The problem that faces us and the problem you should think about in developing the Goals for the State of Georgia is Georgia's need for manufacturing. When we have manufacturing, we produce the means of correcting our problems. When we had no manufacturing, our tax base was so poor that we could not finance a sewage system so we had and still have a pollution problem. With manufacturing, we can buy enough sewer pipe to put in sewage systems. The same applies more or less in all other areas of our lives. If we don't have a solid manufacturing base, we won't have a solid tax base and we won't have a good school system or any other reason for a person to stay in our area.

 

Without manufacturing, there are no jobs and no opportunities for young people. Without manufacturing, our communities and our state will die. On the other hand, with manufacturing, we will prosper.

 

More manufacturing properly integrated into our farm economy will produce the wealth which will raise Georgia's standard of living. Our task is to establish the goals which will permit us to move forward and offer more to our children than we offered to us.

 

Ok, that's the speech. I don't have it written down so it may be a little different each time I give it, but the ideas are the same.

 

You know that I am always followed on the program by someone who talks on natural environment and he usually starts off by saying, "On a certain day in 1956, in London, 4,000 people died as a result of smog. We don't want that to happen in Georgia."

 

Bam! Just like that we are back to the emotional area. To most people, the facts are gone or forgotten. Without another thought, industry is blamed. Industry caused the smog, industry is the polluter. Industry is the killer.

 

Those quick, emotional conclusions are just not right. In fact, they are almost the exact opposite of being right. The real truth is that immensely larger numbers of people died in 1956 because of lack of industry that died because of industry – and the same holds true today.

 

Now you have two statements at opposite ends of the poles. Which is right? What are the problems? Where do we really stand? Well, let's think about this for a moment. Let's keep things in perspective.

 

Just a few days ago, the State of Delaware prohibited the Shell Oil Company from building a $200 million refinery in Delaware. The Governor of Delaware said, "As far as I'm concerned, even if Shell can build a refinery 100% free of pollution, I'm still opposed." He added, "Jobs are very important to our people, but so is the overall quality of life. We can afford to be selective."

 

As for me, Harold Dye, it's just fine if the people of Delaware want to prohibit industry from coming to their state. Perhaps we can gain what they lose? But, what will be the reaction of the people of Georgia? Will we say no?

 

Last week an Atlanta Chamber of Commerce committee submitted a report to the Board of Directors urging that Atlanta's metro population be limited to 1.5 million people.

 

I personally don't think that the Chamber of Commerce will adopt such a policy. Without considerable industrial growth, Atlanta couldn't get the money that would permit them to buy all the land that would be necessary to enforce such a thing. Besides that, most of the Atlanta Chambers members are very practical and knowledgeable, and aren't going to sentence Atlanta to slow death.

 

It's interesting to note that the sub-committee was headed up by a professor who directs Emory's Family Planning Clinic. To tell you the truth, I would expect him to make such a report, but it surprised me to read the final paragraph of the editorial comment on the report. The paragraph reads, "How well the Chamber of Commerce responds to the needs of the metro community in the 1970s will depend on how well and how soon it responds affirmatively to the plan."

Thomas Shepard, Publisher of Look Magazine, has just written an article which he titles, "The Disaster Lobby." Let me read some of what he has written. He starts with a paragraph that sounds like the statement made in "4,000 Dying in London."

 

One morning last fall, I left my office here in New York and hailed a cab for Kennedy Airport. The driver had the radio tuned to one of those daytime talk shows where the participants take turns complaining about how terrible everything is. Air pollution. Water pollution. Noise pollution. You name it, they agonized over it. This went on all the way to Kennedy and as we pulled up at the terminal, the driver turned to me and said, "If things are all that bad, how come I feel so good?"

I wonder how many Americans, pelted day after day by the voices of doom, ever ask themselves that question. I think I have the answer. We feel good because things aren't that bad. Now, I would like to tell you how wrong the pessimists area, and to focus an overdue spotlight on pessimist themselves. These are the people who, in the name of ecology or consumerism or some other "ology" or "ism" are laying siege to our state and federal governments, demanding laws to regulate industry on the premise that the United States is on the brink of catastrophe and only a brand new socio-economic system can save us. I call these people the Disaster Lobby, and I regard them as the most dangerous men and women in America today. Dangerous not only to the institutions they seek to destroy, but to the consumers they are supposed to protect.

 

When it comes to a real measurement of pollution, the single most important measurement is the amount of oxygen in the air. Again, quoting from Shepard, we read:

 

        The Disaster folks tell us that the burning of fuels, by industry, is using up the Earth's oxygen and that, eventually, there won't be any left and we'll suffocate. False. The National Science Foundation recently collected air samples at 78 different sites around the world and compared them with samples taken 61 years ago. Result? There is today 20.95% oxygen in the air – precisely the same amount as there was in 1910.

 

Now, I know this to be a fact. I have seen the National Science Foundation's report. I would go Mr. Shepard one better and say that nature has a way of balancing out its problems including problems caused by man. For example, we have 100 million more pine trees in Georgia today than we did in 1930 and many of them are growing on cotton fields that were losing an inch of topsoil a year by erosion.

 

In this century, three volcanoes have erupted in the world that have put more particulate matter into the air than man in all his existence has done. Yet nature cleaned up after each of them. It took a little time in some cases. If, for example, a lady hung her silk undergarments on the line in Seattle in 1928, six months after the great Alaskan Eruption, the undergarments would dissolve because of the hydrogen sulfide in the air. But six months later, there was no remaining trace of the gas.

 

But what about air pollution? Mr. Shepard writes:

 

You can't deny that our air is getting more fouled up all the time, says the Disaster Lobby. Wrong. I can deny it. Our air is getting less fouled up all the time, in city after city. In New York City, for example, New York's Department of Air Resources reports a year-by-year decrease in air pollutants since 1965. What's more, the New York City air is immeasurably cleaner today than it was a hundred years ago, when people burned soft coal and you could cut the smog with a knife.

 

I remember in 1930, when going to junior high school in Atlanta, I had a winter morning chore of sweeping up the soot on the front porch of our home on Piedmont Avenue. My shirt collar would be black by noon and I hated to show my handkerchief because it too was black. In those years, there wasn't a white building in Atlanta and spring cleaning really meant cleaning up from the winter of pollution.

 

We all know about the latest scare on mercury in the Savannah River. The mercury problem is really exaggerated. Mr. Shepard says:

 

I now come to the case of the mercury in the tuna fish. How did it get there? The Disaster Lobby says it came from American factories, but then the Disaster Lobby believes that all evils in the world come from American factories. The truth, as scientists will tell you, is that the mercury came from deposits in nature. To attribute pollution of entire oceans to the nine hundred tons of mercury released into the environment each year by industry – that's less than 40 carloads – is like blaming a boy with a water pistol for the Johnston Flood. Further proof? Fish caught 44 years ago and just analyzed contain twice as much mercury as any fish processed this year.

Speaking of fish, what about the charge that our greed and carelessness are killing off species of animals? Well, it's true that about 50 species of wildlife will become extinct this century. But it's also true that 50 species became extinct last century. And the century before that, and the century before that. In fact, says Dr. T.H. Jukes of the University of California, some one hundred million species of animal life have become extinct since the world began.

 

Lessening erosion in Georgia has really cut down on all types of pollution. The spring flood of the Flint River carried more pollution to the Gulf than man produces in Georgia in a year. That's a hard-to-measure statement, but I don't doubt it when you consider that those heavy rains cleaned out every barnyard in Georgia and took millions of tons of silt to the sea.

 

Speaking of erosion and wash off, let's consider another greatly exaggerated threat. Mr. Shepard faces this one squarely. He writes:

 

    I'm not a Pollyanna. I am aware of the problems we face and of the need to find solutions and put them into effect. And I have nothing but praise for the many dedicated Americans who are devotion their lives to making this a better nation in a better world. The point I am trying to make is that we are solving most of our problems; that conditions are getting better, not worse; that American industry is spending over 43 billion a year to clean up the environment, and additional billions to develop products that will keep it clean; and that the real danger today is not from the free-enterprise establishment that has made ours the most prosperous, most powerful and most charitable nation on earth. No, the danger today resides in the Disaster Lobby – those crape-hangers who, for personal gain or out of sheer ignorance, are threatening the lives and fortunes of the American people.

    When I speak of a threat to lives, I mean it literally. A classic example of the dire things that can happen when the Disaster Lobby gets busy is the DDT story.

    It begins during World War II when a safe, cheap, and potent new insecticide made its debut. Known as DDT, it proved its value almost overnight. Grain fields once ravaged by insects began producing bumper crops. Marsh land became habitable. And the death rate in many countries fell sharply. According to the World Health Organization, malaria fatalities dropped from four million a year in the 1930s to less than one million in 1968. Other insect-borne diseases also loosened their grip. Encephalitis, yellow fever, typhus, wherever DDT was used, the ailment abated. It has been established that a hundred million human beings who would have died of one of these afflictions are alive today because of DDT.

    Then, in 1962, a lady named Rachel Carson wrote a book called Silent Spring, in which she charged that DDT had killed some fish and some birds. That's all Disaster Lobby needed. It pounced on the book, embraced its claims – many of them still unsubstantiated – and ran off to Washington to demand a ban on DDT. And Washington meekly gave them their ban, a gradual DDT phase-out. Other countries followed the U.S. lead.

    The effects were not long in coming. Malaria, virtually conquered throughout the world, is having resurgence. Food production is down in many areas. And such pests as the gypsy moth, in hiding since the 1940s, are now munching away at American forests.

    In some countries – among them Ceylon, Venezuela and Sweden – the renaissance of insects has been so devastating that laws against DDT have been repealed or amended. But in our country the use of DDT, down to 10% of its former level, may soon be prohibited entirely.

    The tragedy is that DDT, while it probably did kill a few birds and fish, never harmed a single human being except by accidental misuse. When the ultimate report is written, it may show that the opponents of DDT – despite the best intentions – contributed to the deaths of more human beings that did ALL of the natural disasters in history.

 

There is another view that Mr. Shepard did not include in his article. Many of the nation's environmentalists are recommending the elimination of inorganic fertilizer along with pesticides.

 

Scientists at Iowa State University conducted a study this year to learn what would happen to farm production if use of inorganic fertilizers were banned. They concluded that for the next decade, crop average would have to be increased about 22% and food costs would rise about 41%.

 

Let's take this a little further. Imagine cutting forests to make up for the farm acreage required. Forest product prices go up and game preserves go down. Erosion increases and production of oxygen decreases. But imagine, if you can, the trillions of flies produced in organic fertilizers with no insecticides to counter them.

 

Enjoying our environment would be impossible. Life will be something like that described by Mr. Dolson, Chairman of the Board of Delta Airlines, when he was asked about the pollution caused by jet aircraft. He said, "If all the people who now travel by jet were to travel by horse and buggy, you would have to be six feet tall to see above the horse manure."

And this reminds us of the good old days.

 

Again from Mr. Shepard:

 

    Members of the Disaster Lobby look back with fond nostalgia to the good old days when there weren't any nasty factories to pollute the air and kill the animals and drive people to distraction with misleading advertisements. But what was life really like in America 150 years ago? For one thing, it was very brief. Life expectancy was 38 years for males. And it was a grueling 38 years. The work week was 72 hours. The average pay was $300. That's per year! The women had it worse. Housewives worked 98 hours a week, and there wasn't a dishwasher or vacuum cleaner to be had. The food was monotonous and scarce. The clothes were rags. In the winter you froze and in the summer you sweltered and when an epidemic came – and they came almost every year – it would probably carry off someone in your family. Chances are that in your entire lifetime you would never hear the sound of an orchestra or own a book or travel more than 20 miles from the place you were born.

 

Now I could go on with this, but I think we have heard enough to know that there are at least two sides to the problem.

 

There are some positive conclusions that can be drawn that may be far more important to us than we think.

 

California has an air pollution problem. It is caused by a temperature inversion which make South Carolina a hothouse. Southern California's air is held in place by a temperature blanket, just as if it were a glass covered hothouse. California needs stringent rules to cope with this problem. But these rules are for California. They should not be for Georgia.

 

Early last spring, Atlanta had a pollution count of 89. The television weatherman recommended that we shut down the Georgia Power plants along the Chattahoochee to lower the count. (100 is supposed to be the danger point.) The weatercaster did not consider that two-thirds of the count came from pollen in the air and only a small, small fraction came from Georgia Power. He should have recommended that we shut down nature herself, but then again, he is a member of Mr. Shephard's Disaster Lobby.

 

On the day we had a high pollution count, Birmingham had a count that was over twice as high – way past the so-called danger point. But Birmingham is unique, surrounded as it is by mountains. Automobiles, factories, people and nature combined to fill the bowl with a high pollution count. Atlanta on the Piedmont Plateau will never be faced with the same problem. Nature gave Atlanta a great location. Birmingham abatement laws should be far more strict than Atlanta because Birmingham, like Pittsburg and Southern California, has a unique natural condition which must be faced.

 

We do not want to make Georgia pollution abatement laws more stringent than those of our surrounding states. After all, the air over Alabama today will be over Georgia tonight. If Alabama gets an industry that we have prohibited because of inequitable laws, we will have their pollution from that industry tomorrow, if the industry created pollution to begin with.

 

Our legislature meets in a few months and chances are that dozens of laws will be presented to them for action. One of our jobs is to help acquaint the people of Georgia with the real facts, so that they will not place ill-advised pressure on our legislature.

 

This is my real point today. Let's tell the people the truth about our need for industry and that with industry, we can solve our problems. We must acquaint the people of Georgia with the real facts of life in Georgia.

 

And the fact is, stated so that we cannot forget it, "Without industry, Georgia will die."