Evening star., 1940-09-29
Antitrust Action
; Against Oil Firms
Due This Week
Government Will Not
Interfere With Facilities
Needed for Defense
BY !. A. FOX.


with antitrust proceedings to END
alleged price fixing" and other
"abuses" in the oil industry. but will
defer for the time being any move
to force oil companies to rid them
selves of distribution and marketing
facilities which are needed Tor the
national defense program.
The decision was announced late
yesterday by Attorney General
jackson in a letter to Senator Gill
lette, Democrat of Iowa, after the
department had been studying for
Atwo months the course to be followed
in the long contemplated action to
dissolve the principal oil companies
of the country, in the light Of de-
veloping preparedness needs.
A civil suit will be instituted in
District Court this week. An an
nouncement in August said the pro-
ceedings are directed at % major oil
companies, their subsidiaries and
aff1liates.
Commission Consulted.
In the letter to Senator Gillette,
AtUOIllCy al OdShSoIi ISSdllCo
that the views of the National De-
tense Commission had been asked in
the matter, and said its recommen-
dations were being followed.
The Defense Commission, he
wrote. advised me that it would
Fundamentally approve any ap-
propriate legal action brought to
iv,fc
petition where they are proved to
exist In accordance Herewith I
have authorized the Anti Trust
Division to commence the proposed
civil action so far as 1t seeks to
prevent existing abuses in the oil
industry, including price-fiXing, dis
examinations, and all practices
which tend to restrain or prejudice
the independents in the industry or
Ito jeopardize the interests of the
consumers.
The Defense Commission indi-
Gated that court decree Of divesti-
ture at this time would create a
number of serious problems for the
national defense. Accordingly, this
action does not seek at this time
to compel the oil companies to get
rid of their pipe lines, barges, or
other facilities for the transporta-
ton and distribution of petroleum.
! believe there might be serious
consequences from disruption of
these facilities at time when We
have no capital presently willing,
so far as I am able to ascertain. to
acquire and operate these facilities
by themselves.
Suit Not Being Abandoned.
"The National Defense Commis-
sion, however, referring to the di-
vestature phase of the case says
the commission does not suggest
that the proposed suit should be
abandoned 1t is not being aban-
doned, and no action is being taken
inconsistent with divestiture pro-
ceedings, either in later action or
by amendment of proceedings in
. the existing suit if, at the time of
trial it shall appear that the abuses
in the oil industry can be corrected
In no other way"
The oil suit was ready for filing
late in July, and when reports be-
came current that an effort was being
made to head it off to insure the
cooperation of the oil industry in
the defense program. Attorney Cen
eral Jackson and the commission
issued statements denying this, and
explaining that the only reason for
delay was to give the commission
time to comply with the request Of
the department for report on the
various aspects of the litigation.
In pointing out, in its report, the
dangers in the proposed divorce
ment of marketing and transporta-
ton facilities, the commission ex-
planned that the Army and Navy
not only are planning to take ad-
vantage of the present distribution
machinery of the oil industry, but
also are interested in an expansion
of these that will cost millions.
Gillette Urges Action.
Senator Gillette, an advocate Of
legislative reforms in the oil indus
try, has been urging that the
department proceed with the case
without further delay and Attorney
General Jackson told him that there
is no reason why this litigation
~should interfere with any plans
Congress may have for dealing with
this problem.
Moreover" he added, court de-
erees are in the main negative
affairs forbidding certain acts, COM
binations and contracts They do
not necessarily lead to constructive
steps in industry In shaping legis-
lation, the Congress can provide
comprehensive and constructive
plan"
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