The Impact of Inflation on Managment Decisions; W. Peterson

This article is from a paper delivered before a symposium of the Academy of Political Sci ence at Columbia University, November 11, 1974, under the overall topic of "Inflation, Fiscal, Social and Economic Impacts." Data herein on the 1974-75 recession have worsened since this paper was given. agement is planning. Management is organization. Management is responsibility. Management is profitability. It is also leadership, discipline, practice, performance, accounting, marketing, tasks, com munication and information. Man agement is - in. the final analysis - decision-making. But making decisions on whose behalf? Management's? The em ployees'? The shareholders'? The community's ?The business' as a whole? Not really. For what is business? Business is service. Or, to put it baldly, busi ness is a hired servant. Hired by, whom? The consumer. Yes, busi ness is guided 'by profitability, by its own self-interest; yet it is sub ject to the sovereignty of the con sumer. As Ludwig von Mises pointed out, "Production for prof\t is necessarily production for use, as profits can only be earned by providing the consumers with those things they most urg~ntly want to use."

So the test of a manager's de cisions is profitability - the extent 399 400 THE FREEMAN July to which he increases revenues and cuts costs. Business management is profit management. Consumers reward efficient management with profits and penalize inefficient management with losses. Now, what is at stake when we weigh the impact of inflation on management? Remember that business - or, more broadly, the private sector - is the principal source of jobs: Of our total labor force of about 94 million, govern ment furnishes only 16.5 million jobs. This includes more than two million members of the armed forces. With 5.5 million presently unemployed, this means that busi ness, including agriculture and the professions, furnishes the remain der - around 72 million jobs. Busi ness is also the source of most economic output. Thus it generates the bulk of real income in our society - food, clothing, shelter, transportation, medicine, informa tion, and the like.

So what is at stake in the on slaught of inflation? Nothing less than the survival of the business system itself. Note that while I tick off the inflationary distor tions on management decisions, I reserve the greatest distortion un til last - the possibility of a sharp recession or even a' depression. Managers can get a fast over view of the problem of coping with soaring prices by simply noting how the process of inflation dis torts the traditional functions of money. Impact on Functions of Money Money, we were told in Econom ics 101, is first and foremost a medium of exchange. Quite obvi ously, then, under inflation the purchasing and employment man agers will find that, economize though they may, more and more money is required to buy the same amount of goods and services, in cluding labor. The pricing man ager also must be quick on his feet to avoid a cost-price squeeze; hence he must seek to keep his prices ahead of costs as far as competition and other factors al low.

Ironically, money has become such a "hot potato" that some man agers, especially those involved in international transactions, don't want to hold it and prefer goods instead. Indeed, some managers trade raw materials for finished goods and vice versa. Thus, through swap arrangements, they alleviate shortages while retreat ing from money as a medium of exchange. Too, Eco. 101 reminded us mon ey has a stor'e of value function the retention of purchasing power over time. Inflation, however, is a thief of that power. The financial manager is thereby under pressure 1975 THE IMPACT OF INFLATION ON MANAGEMENT DECISIONS 401 to put his liquid assets to work as rapidly as possible. Bluntly, he must hedge against inflation, bal ancing his choice of investments between yield and risk. He will also seek to expedite the collection of accounts receivable, exacerbat ing the general squeeze on liquid ity.

Again, money is a standard of value - a unit of account, a yard stick for relative prices. Inflation similar ly distorts this function of money by shrinking this key ac counting measurement. A dollar is no longer a dollar over time; it is no longer predictable; it no longer permits accurate economic calcula tion; it is 80¢ or 70¢ or 60¢ and so on, depending on the length of time and the pace of inflation; and all historical financial records thus call for careful interpretation. The usual tool to accomplish such in terpretation is the concept of con stant dollars which allows some comparability among accounting periods. I say "some comparability" for changes in the Consumer Price In dex, the Wholesale Price Index and the GNP Implicit Price De flator can still not be considered scientific measurements of infla tion. Inflation is notoriously un even, with some prices advancing rapidly, some moderately and some lagging behind.

Constant dollars are an especially inadequate tool for multi national corporations. They use different currencies, each with a different history of inflation. Also, rates of inflation and rates of ex change in money markets vary, rendering translation of foreign currencies into U.S. dollars for consolidated financial statements much more difficult. Lastly, Eco. 101 assigned a fourth function to money-a stand ard for deferred pa,yments. One of inflation's most bitter repercus sions is that it warps all debtor creditor relations. In other words, money as a standard for deferred payments has all too often become a shrinking standard. The borrow er is thereby able to repay his debt with cheaper money than that he initially borrowed. In other words, inflation fleeces the credi tor. This hard fact of our infla tionary era means financial man agers have to adjust their lending activities, such as acquiring com mercial paper and certificates of deposit. By the same token, finan ial managers have to adjust their borrowing activities, such as get ting bank lines of credit and issu ing corporate bonds. Lending or borrowing, financial managers should recognize that the largest single element in the height of in terest rates today is the level of inflation, currently at a two-digit level.

402 THE. FREEMAN July The foregoing section points up some current monetary distortions: My purpose in this paper is to give some perspective to the manage ment side of inflation and to detail some ramifications of the impact of inflation on the decision proc ess. In particular, I wish to briefly examine the distortions of infla tion in the decision areas of prof its, inventory, capital investment, wages, international operations, price controls and the business cycle. The overriding distortion is in formational. Good decisions are dependent upon good information. Much if not most of that informa tion, however, is undermined both quantitatively and qualitatively by inflation. It therefore behooves managers to seek to correct, as best they can, their information for inflation. Impact of Inflation on Profit Calculations In 1974 people in high places have been charging that corporate profits are "excessive," "uncon scionable" and even "obscene."

These adjectives sound hollow against the backdrop of a disas trous stock market. The words sound even more hollow when cor rections of profit figures are made for inflation. Dramatic results are obtained with three major corrections: 1. Underdeprec'iation of plarn.t and equipment, due to depreciation allowances based on original cost rather than repla,cBm,entcost. This practice has long led to a general overstatement of corporate profits, with consequent overpayment of corporate income taxes and even overpayment of dividends. These result in diminution of potential capital formation. Tax authorities have recognized this problem and have dealt with it to some extent by setting up investment tax cred its and accelerated depreciation methods. Financial managers have taken advantage of these provi sions to varying degrees. Yet these provisions have proven to be in adequate in view of our two-digit inflation. Both tax authorities and financial managers would be well advised to recognize this deprecia tion deficiency and the drag it im poses on economic growth - on the economy as a whole and on each individual enterprise. The average age of American plant and equip ment continues to lag behind that of our major industrial competi tors overseas, and behind what is needed to meet the expectations of our growing population. So still more realistic and competitive de preciation methods are clearly needed.

2. Allowance for the infia,tion that has diminished the profit dol lar. Inflation has eroded the pur1975 THE IMPACT OF INFLATION ON MANAGEMENT DECISIONS 403 chasing power of the dollar by more than 40 per cent since 1965. So on this count alone, and despite more than a trillion dollars (in today's prices) poured into plant and equipment, corporate profits have shown but minor increases since 1965 in real terms. For as sensible is the conversion of money wages into real wages, so financial managers can sensibly convert money profits into real profits. To be sure, second quarter re sults in 1974 were about 25 per cent ahead of those of the second quarter of 1973. But price controls came off completely April 30, 1974, allowing many firms to catch up with true supply and demand. Moreover, if the spectacular gains of some basic materials industries are excluded, along with the atypi cal profits of the auto industry, the bulk of industrial companies made only a moderate increase of 10 to 11 per cent in the first half of 1974 - just about equal to the rate of inflation.

In any event, corporate financial and public relations managers may want to deflate their profit figures and remind the public of the cor porate return in real terms. Yet these managers are frequently re luctant to do so, beholden as they are to shareholders and given to pointing with pride to "record" profits. The economy therefore suf fers because of management's desire to show good earnings during an inflationary era. 3. Overstatement of profits be cause of the understatement of in ventory values. Some authorities call inventory gains "p'hantom profits," which disappear the mo ment inventory is replaced. The magnitude of inventory profits can be seen in the Commerce Depart ment calculations of $37.9 billion annual rate in the second quarter of 1974, up from $31 billion in the first quarter and $20 billion a year earlier. For perspective, after-tax corporate profits ran at a season ally adjusted annual rate of $85.6 billion in the second quarter of 1974, up only $500 million from the first quarter, despite $6.9 bil lion of inventory profits.

To put their own corporate prof its in a truer light, quite a few financial managers are switching from first-in, first-out (FIFO) to last-in, first-out (LIFO) for more accurate inventory valuation. It's about time. In an editorial on Oc tober 1, 1974, the Wall Street Journal criticized those financial managers who got caught up in the earnings-per-share mystique and used FIFO to that end. With rising inventory prices, FIFO per mitted higher reported earnings all right, but it also permitted in fact, required - higher taxes on those earnings. Indeed, FIFO thereby fostered less capital to in404 THE FREEMAN July vest for long run returns. Capital markets don't ignore such unreal istic accounting. The Journal re ferred to a study by Shyam Sun der, an accounting professor at the University of Chicago graduate business school, in which 118 LIFO firms listed on the New York Stock Exchange outperformed the market in stock price appreciation by 4.7 per cent.

Economist George Te-rborgh of the Machinery and Allied Products Institute in Washington, D.C. has made all three of the foregoing adjustments to 1973 corporate profits. He found that such ad justed profits came to less than 60 per cent of what they were in 1965. Retained earnings, he found, were down even more significantly; they were but around $3 billion, or 16 per cent of what they were in 1965. The portent for real capital invest ment and real economic growth in the immediate future is hence not very great, mainly because of the disastrous inflation we have been incurring for the past two years. Impact on Inventory Planning Inflation also muddies inventory planning, as can be gathered from my references to LIFO-FIFO ac counting methods. Ideally, the in ventory-sales ratio should be kept as low as feasible so as to mini mize the cost of storage and the cost of money tied up in inventory.

But inflation creates all manner of uncertainties because of rising prices in raw materials, semi-fin ished and finished goods. As these prices rise, purchasing managers naturally undergo temptations to Hbeat the gun" by accelerating their forward buying. The pur chasing manager of course realizes that his cost of storage and tied up money will thereby go up. But he may hold that these costs are more than offset by being able to obtain inventory at lower prices than he could later. Too, with a surge of buying he may also begin to worry about availability and de livery delays. So, he inadvertently adds to speculative activity and puts pressure on prices, as he ac celerates his forward buying. With all this, however, his inventory sales ratio may not advance if other purchasing managers adopt the same hedging behavior and also increase their forward buy ing; the result is that as his in ventory climbs, so do his sales.

This would be especially true if the purchasing manager is in a basic ,materials industry. But such inventory buildup behavior, stim ulated by surging demand, tends to be shortlived. For on this score alone, inflation may be contributing to a key fac tor in the business cycle - inven tory buildups, which can lead to a boom, and inventory liquidations, 1975 THE IMPACT OF INFLATION ON MANAGEMENT DECISIONS 405 which can lead to a bust. Ironically, the liquidations in effect contrib ute to deflationary pressures on the very price-inflated commodities and goods that brought on the in ventory buildup in the first place. Impact on Capital Planning In like manner, inflation dis rupts capital planning. Business may be good and the backlog long, but the long-run outlook remains unclear. The planning manager is thus put in the· same quandary as the purchasing manager. On the one hand, he doesn't want to tie up his financial resources in the fixed costs of under-utilized plant and equipment and incur the burden of unnecessary overhead. On the other hand, he is lured by the possibility of obtaining capacity at a significantly lower cost than he could in later stages of inflation; and, he hopes, maybe his order backlog won't evaporate.

This quandary is especially vis ible in the basic materials indus tries such as energy, metals, paper, chemicals, and so on. These indus tries are extremely capital-inten sive. Moreover, because these industries lend themselves to sig nifican t economies of scale and re quire long lead times for new facility construction, new capacity demands tend to come in lumps rather than in evenly spaced-out requirements. The process is exacerbated by inflation and the business cycle which give wider swings and a feast-famine aspect to the capital goods industry. This aspect: is in herent in the capital goods indus try anyway, as the accelerator theory of J. M. Clark demon strates. This theory says that a change in demand for consumer goods tends to have an accelerated change in the demand for capital goods, assuming that the economy is operating at full capacity. Infla tion accentuates the problem of the accelerator by giving exag gerated indications of consumer and capital goods demand.

Inflation and the business cycle itself seem to be initiated by cred it expansion and artificially low interest rates, both aided and abet ted by the central bank. The low interest rates give businessmen false signals of genuine capital availability made possible by sav ings when the fact of the matter is usually a central bank speedup of money supply growth. The speedup provides the familiar sce nario of too much money chasing too few goods, winding up in "stag flation" - a combination of infla tion, extremely high interest rates and economic stagnation. (The cyc lical process is spelled out more fully at the close of this paper.) The scenario comes at a bad time. Capital formation has lagged 406 THE FREEMAN July for a long time in America. The American economy must modern ize and expand its plant and equip ment to accommodate its growing labor force, to reach its energy and ecological goals and to com pete in an increasingly competitive one-wor ld economy.

International competitiveness has been rising at the same time that the U.S. has been lagging be hind its major overseas competi tors in the pace of investment. Here are comparative rates of cap ital investment for 1973, using gross private domestic investment as a percentage of GNP: United States 16 per cent West Germany 26 per cent France 28 per cent Japan 37 per cent So U.S. capital needs are enormous. The New York Stock Ex change has just completed a care ful technical study on the capital needs and savings potential of the U.S. economy through 1985. The study aimed at developing realistic projections of U.S. capital supply and demand over the next 12 years. For this period the study came up with the following quantitative conclusion: Saving potential $4,050,000,000,000 Capital requirements -4,700,000,000,000 $ (650,000,000,000) In other words, the numbers suggest that the present estimated saving potential in the American economy through 1985 - from all domestic sources - is slightly bet ter than $4 trillion. At the same time, capital demand or require ments will possibly hit a grand total of $4.7 trillion, or more than three times the rate of the previ ous twelve years in current dol lars. The painful indicated capital gap - fraught with human misery - is hence estimated at $650 bil lion or $54 billion a year. Contin ued inflation can only compound this problem, impeding, as it does, the two critical processes involved in capital formation: saving and investing.

Impact of Inflation on Wages Wages constitute some three quarters or more of all industrial costs, or much more than most businessmen seem aware, inasmuch as a large fraction of-this amount is paid indirectly in the form of purchased goods and services. These goods and services, in other words, themselves embody much labor cost. The point is that cost-push in flation is largely wage-push infla tion. So, to quite an extent under the doctrine of "full employment," as wages go so goes inflation. In any event, given the state of our relatively one-sided collective bar gaining today in what Sumner Slichter of Harvard called our 1975 THE IMPACT OF INFLATION ON MANAGEMENTDECISIONS 407 "lahoristic" economy, the indus trial relations manager can not do a great deal to soften the terms of the labor contract, other than to inform his opposite-number union negotiators of the state of the in dustry and his company, the com petitive realities and the stage of the business cycle. Also, he can ad vise top management whether the company should accept a strike as a way of winning more amenahle terms.

With all this, however, the tra ditional collective bargaining areas of wages, hours and working con ditions will likely be set in con tract provisions not entirely to the industrial relations manager's lik ing. Inflation tends to induce work laxity. Working conditions, for ex ample, may be characterized by restrictive work practices, which of course hamper labor productiv ity improvement - practically the only source of real wage gains. Lessened productivity, in turn, contributes to the inflationary sit uation of "too few goods." Some of these restrictive work practices are obvious and direct. For example, size restrictions on the width of paint brushes and rollers, a 150-mile definition of a "day's work" for trainmen, a limit on the size of cargo slings used by longshoremen, a typographers un ion requirement that "bogus type" be set as an offset to the use of advertising mats. Some restrictive work practices are indirect and not so obvious. For example, hiring hall arrangements in some fields of employment and control of the la bor market by limiting entrants to a particular labor force such as construction.

Importantly, too, the wages pro vision of the labor contract is sim ilarly inflationary when agreed-up on wage increases exceed produc tivity gains and worsen the unit labor cost picture of the firm. The firm is thereby under press ure to recoup the added cost burden from its customers. It will unquestion ably do so if the union contract is in the industry pattern and if the banking system has in effect ac conlmodated the higher wages with greater demand. If the accommoda tion isn't made, unemployment will likely expand. Even with such ac commodation, unemployment will still ultimately expand because of the additional demand pressures created by the new money leading to uneconomic higher unit lahor costs. Demand by employers is likely to falter anyway as inflation brings about excessive minimum wages and labor union settlements over and above market demands. In any event, the long-run corre lation between increases in unit labor costs and the rate of infla tion is unmistakable.

At the same time inflation tends 408 THE FREEMAN July to give management a cost-plus mentality with regard to these~ settlements. If demand is rampant, the employer may shrug his shoul ders at the otherwise exorbitant wage demands, yield to them and raise his prices accordingly - a scenario that works in the early stages of inflation. The scenario is accentuated by inflated expecta tions on the union's part. Not so many years ago a 4 or 5 per cent wage increase demand was work able. Now the teamsters or the plumbers or the coal miners or the phone workers demand 20 to 30 per cent and settle for 10 to 15 per cent. Thus in the third quarter of 1974, according to the Labor Department, the average wage in crease for new major union con tracts came to 11.3 per cent, up from 10 per cent in the second quarter. These increases add fuel to expectations and the inflation ary process, in light of the histor ical postwar labor prod ucti vity improvement factor in the U.S. of around three per cent a year.

The process is exacerbated, I submit, by the use of cost-of-living escalator clauses. Some five million members of the labor force are covered by such clauses and this number is growing. Escalator clauses tend to be little engines of inflation since they push up wages and unit labor costs as the Con sumer Price Index rises, and thereby tend to push prices and the CPI even higher, or create un employment and pressure for mon etary expansion. In other words, the escalator clauses act as a built in wage-price spiral as well as a built-in worker disemploying agent. Impact on International Operations Decisions in the international area are greatly influenced by in flation. Corporate money manag ers, for example, have had to deal in recent years with "hot money" around the world. They have had to hedge against threatened cur rencies to protect their accumu lated investment funds from ero sion because of inflation or devalu ation. Currencies have been not only devalued but upvalued, float ed and repegged. The United States dollar itself has undergone two devaluations since December 1971, causing quite a turmoil in the currency portfolio of virtually eveTy multinational corporation.

Quite a few multinational corpo rations, including banks, have had to absorb significant losses from currency fluctuations. A prime ex ample is the Franklin National Bank failure. Corporate money managers have therefore found it necessary to increase their hedg ing and swap arrangements to minimize these losses. Again, the quadrupling of oil 1975 THE IMPACT OF INFLATION ON MANAGEMENT DECISIONS 409 prices via the OPEC cartel has led to some second thoughts in corpo rate board-rooms on industrial ex pansion proj ects here and abroad. Energy the wo~ld over has become not only very expensive, but has become tied up in political prob lems involving its basic avail ability. Indeed, there is even a growing possibility of further na tionalization and expropriation, al though this possibility is also brought about by general inflation and other factors. The high cost of oil and almost every other basic commodity, in cluding wheat, rice, sugar, zinc, tin, aluminum, steel, and the like, has worsened the balance of pay ments positions of virtually every major industrial country. The re sult is that these countries are now tending to discourage non-energy imports while pushing their ex ports harder to offset higher oil prices. Accordingly, corporate money managers will probably find export credit financing sweetened by government agencies in all the countries in which their companies do. business, and new barriers to entry for the goods they wish to import into those countries. The effect of all this is to increase trade restrictions - to narrow world markets while ironically ac celerating world competition.

Another result stemming from the OPEC model is the incentive for other developing nations to ex ploit the basic commodities with which they are blessed. The baux ite countries, notably Jamaica and Guyana, have already sharply raised prices to the aluminum companies. Rumblings of like ac tion have been heard from the copper-prod ucing , coffee-producing and tin-producing countries, among others. So we begin to see how inflation more and more disrupts normal in ternational economic relations for multinational corporations. The years since World War II of har monious trade and international division of labor, so conducive to world peace, seem to be coming to an end. We are apparently enter ing an era of economic isolation ism wrought by the internationali zation of runaway inflation. Impact of Price Controls on Management One impact of inflation is polit ical - a tendency for governments to react to inflation with wage and price controls. The irony of such government reaction is twofold: First, government itself is over whelmingly responsible for the in flation it seeks to correct; and second, wage and price controls treat symptoms, not causes; they repress inflation, mask it, causing shortages and distortions while al lowing inflationary forces to be-, 410 THE FREEMAN July come even more virulent. The pe riod of the "New Economic Policy"

from August 15, 1971 to April 30, 1974 is a case in point. Corporate managers in this pe riod generally experienced a cost price squeeze. In other words, they found their prices lagging behind their costs, chiefly labor and in terest costs. In such a squeeze, many of them fled the regulated domestic market and shipped to· unregulated markets abroad. This situation merely worsened the dis tortions in relative prices and the shortages endemic to the entire wage-price control era. Besides shortages, corporate managers had to contend with rampant demand, shipment delays, quality lapses, multiplying bureaucratic interfer ences and, ultimately, breakdown of the controls themselves. This breakdown in turn led to a rash of "catch-up" wage and price increas es, which haunt us down to this very hour. The controls led not only to a profit squeeze, but to a capital in vestment squeeze. Many basic ma terials industries, for example, knew that they had exhausted their capacity limits and that their backlogs could be measured not in months but in years. Yet they still could not set aside expansion funds by the retained earnings· route, with earnings so squeezed; they could not raise equity funds with their stock prices so depressed; and they could not go to the bond market, with inflated interest rates reaching double-digit levels. The upshot was that supply became tighter and tighter across the country.

Inflation and Business Cycle Of critical concern to manage ment is the turn of the business cycle. Should the company expand operations or retrench? What lies ahead: boom or bust? Management is helpless in doing anything about the cycle; like death and taxes it is there, stark and inexorable. Or so it seems. About all management can do is to try to forecast the turn and act accordingly. But forecasting, even by elaborate computerized econo metric models, has proven woefully ineffective over recent years. It has shown itself to be anything but a science. It is ~n art, and a dubious art at that,as the record of business forecasts sadly evi dences. As Walter W. Heller, chair man of the Council of Economic Advisers under Presidents Ken nedy and Johnson, declared at the December 1973 meeting of the American Economic Association meeting in New York: "Economists are distinctly in a period of re-examination. The en ergy crisis caught us with our parameters down. The food crisis 1975 THE IMPACT OF INFLATION ON MANAGEMENT DECISIONS 411 looks like this. Credit expansion puts pressure on resource prices but profits boom. Capacity is strained, so new capital expansion projects are launched. Cost-price squeezes develop. Inflation leaps ahead. Interest rates soar. The stock market falls. Consumers retreat ..

Businesses fail, especially as their debt structure becomes unservice able. Expansion slows down, and the recession begins. The reces sion, if allowed to run its course and if inflation slows down, be comes part of the cure. If these two criteria are not met, the re cession can turn into a depression. In sum, the impact of inflation on management decisions is all pervasive. There is no handy es cape hatch. Losses for manage ment - and for society! - are al most inevitable due to the deteri oration of economic calculation, the increase of unce'rtainty, the evaporation of purchasing power, the damages of recession. The best remedy for inflation is to get at its taproot - deficit spending and ex· cessive money creation. As good citizens, corporate managers might well remember the observation of Dante: "The hottest places in hell are reserved for those who, in a peri od of moral crisis, maintain their neutrality." ~ caught us, too. This was a year of infamy in inflation forecasting.

There are many things we really just don't know." But why is it that practically the entire business community is suddenly thrust into a huge crop of sharp profit setbacks or out right losses? Why is it that even blue-chip managements, noted for their track record of achieving profits and shunning losses, sud denly find their order backlog fad ing, the more so for capital goods managements? I believe inflation is at the root of the business cycle, as Ludwig von Mises and 1974 Nobel Prize winner Friedrich von Hayek have long pointed out. Specifically, they have observed that the appearance of the business cycle roughly co incided with the origins of the fractional reserve banking system along with central banks. They have criticized credit expansion (not based upon actual savings) and the doctrine of easy money ready availability at artificially low interest rates. They have also criticized central banks for aiding and abetting the process by pump ing in additional bank reserves and becoming lenders of last re sort. And they have criticized cen tral banks for becoming giant printing presses through monetiz ing government deficits.

For management the process * * * EARL W. McMuNN You CAN'T trust any existing agency of government to protect the interests of the people of this country. The cure is to set up yet another agency. That one, you will be able to trust! This is the think ing of those who support the pro posed Consumer Protection Act which would establish a new watchdog agency within the fed eral government. Advocates of big government j usUfy every proposal on the basis of what it allegedly will do for people. Overlooked is what it will do to them. The price tag is never displayed. This is the case with the Consumer Protection Act. The implication is that existing agen cies of government are not pro tecting the interests of people. All this will change when a super Reprinted f~om The Ohio Farmer, April 19, 1975. Copynght, The Harvest Publishing Com pany. !\:fr. McMunn, for many years editor of The OhIO Farmer, recently became full-time Direc tor of Public Affairs for the Cleveland-based Harvest Publishing Company.