Evening star. [volume] (Washington, D.C.) 1854-1972, 1940-09-08
Anti Trust Prosecutions Likely
To Become Issue of Campaign
Thurman Arnold and Defense Commissioners Led
by Leon Henderson Disagree on Wisdom
of Filing Suits Now
By Marqnis ". ChHds.

sharp division is growing up within
the Roosevelt administration over wheth-
err the antitrust laws shall be enforced
against industries essential to the pro-
gram of national defense This dispute,
already at the acrimonious stage, may
even be brought into the presidential
campaign this fall, involving as 1t does
the question of prices and the national
living standard vital to all consumers.
On the one side is Assistant Attorney
General Thurman Arnold, head of the
antitrust division, who is determined
to enforce the law, insisting that to
waive antitrust provisions would be TO
invite an upward spiral of prices which
would seriously upset the national econ
omy. Restrictions on production exerted
through patent controls and price agree
ments, would seriously hamper Americas
effort at rearmament, Mr. Arnold mas
argued. And rapidly rising prices and
lowered standards of living would cause
disaffection and disunity in the country,
he has said
On the other side are members of
the National Defense Commission and
others in the Roosevelt administration
who take the view that anything which
Is likely to impede the defense program
should be given the most careful study.
The possible effect of drastic antitrust
action should be fully understood be-
fore any final step is taken, they argue.
In particular, Leon Henderson, named
cir fla
guarding against price increases, has
stressed this view.
Oil Companies Accused.
The argument is centered around
Mr.. Arnold's intention to prosecute major
oil companies in an effort to compel them
to cease practices he claims are monopo-
hStlc. The big companies, Mr.. Arnold
contends, set prices throughout the coun-
try and charge the consumer far more
than is warranted. BY virtue of control
of refineries and pipe lines they impose
what is in effect a tax on all consumers.
IN Mr.. Arnolds view, and he proposes
to make it possible for independent
companies to compete on equal terms.
But recently the Defense Commits
sion approached certain of the major
OIL companies with the request that
they begin construction of plants for
the manufacture of aviation gasoline
as part of the defense program. Other
companies were asked to begin the ex-
perlmental production of artificial rub
Der from petroleum, also part of the
effort to make America self sufficient.
AT about the time that Mr.. Arnold
recommended to Attorney General
jackson Inauguration of civil suit
against % major oil companies, a men,
orandum case from the Defense Com
mission suggesting that careful study
be given the effect of such a suit be-
lore any action should be taken. Mr..
jackson agreed to this, and the COM
mission is now engaged in an inten-
s1ve study which is not yet completed.
Experts under Mr.. Hendersons direc-
lon are considering every phase of
the oil industry.
Meanwhile, Mr.. Arnold is finding it
difficult to conceal his impatience. He
1eelS the whole issue of antitrust en-
torcement is at stake, and those who
support MIN, including a number of
members of Congress. fear that if the
Government yields on oil it will of
necessity yield in every other field.
They point out that the oil adviser to
the Defense Commission is Robert E.
Wilson, head of Pan-American Petro-
leum Co., Standard Oil subsidiary.
Plea for Balanced Prices.
preparation for war" Mr.. Arnold
said in recent speech, must not lower
the purchasing power of wages or make
relief more costly. Farmers and con-
sumers will have to pay for national
defense in taxes. They must not be
required to pay double because of con-
trolled prices ..
THE race between higher wages and
higher costs of living was the chief
contributor to unduly expensive mill
tary preparation in the last war. I'm
balanced prices and uneven distribu-
ton are the chief causes of the high
cost of military preparation
AS an example of the practical results
that can come out of antitrust enforce
ment, Mr.. Arnold cited the example of
gasoline prices here in the District of
Columbia, where there is an exception
ally large number of filling stations.
Some of the independent stations are,
naturally on the border line of solvency,
and so the owners came together to agree
on fixed price per gallon and end COM