The Wilmington morning star., 1940-02-15
WASH|NGTO ON
DAYBOOK
BY PRESTON GROVER

WASHINGTON, Feb 14.-Assistant Attorney
General Thurman Arnold's shakedown Of the
alleged rackets in the building industry will
have to get along this troublesome election
year with a bob-tailed appropriation.
Arnold fumbled. He might have got his
money if he had linked his case with national
defense. That is the one thing these days that
will survive-at least in part-the economy
wave. ....
J. Edgar. Hoover, chief Oman, was cagier.
Hoover nabbed STATS, 900 out of the deficiency
bill to hunt spies and saboteurs in the mum.
lions and airplane plants for the next six
months, and got an additional $2,4SS,00o to
hunt them from July 1 on.
But Arnold had a different case. He simply
told the house appropriations mmitt that
his Investigators had uncovered plenty of rack.
eteering in the building industry. In some cities,
he said, racketeers have hiked the price of a
home or an office building by Is per cent.
Even while the appropriation bill was pend.
ing in the house, a whole herd of accused PEG.
Pile in Pittsburgh agreed to pay fines and mend
their ways. 1t was the first real fruit OF the
building trades investigation.
1--WE believe the savings in Pittsburgh alone"
said a Pittsburgh paper, would be sufficient
to pay the entire cost of the national investi'
CATION"
It's a Simple Plan
We went over to the justice department to
INA WHAT SOrL OIL rdckeLeeIlnS AEHOlQ was ait
er. One of his aides outlined it.:
A big contractor decides to bid on a building
job, he invites a lot Of sub-contractors to quote
him figures on portions Of the job, such as
wiring, bricklaying. plastering and; plumbing.
In the old days he would simply pick the low
bidders from each group, add In the cost Of
the amount of work he would do with his own
outfit, then have a basis on which to bid.
But, in a typical case, the sub-contractors de.
cided they were cutting their own threats.
They decided to organize a "poof' to which
each bidder would submit his ibid-just to com
pare notes. That was legitimate and no chisel.
ing was involved. But the next step, our infor.
mant said, was for the sub-contractors simply
to meet around a. table, take ali the competf'
ton out of the bidding, and apportion the
work among themselves at comforting prices.
AS other jobs came along, the contracts would
rotate.
Getting the labor unions into the setup was
the next step. To protect their own bids, the
pool of sub-contractors would have to shut
out an honest low bid from outside. That was
simple. They went to labor unions, agreed to
pay top union wages plus a cut to labor agents
under an agreement that the unions would re.
fuse to work for any contractor who was not
in the pool.
That made the set-up complete. Any sort of
agreement could be worked out. Manufacturers
and dealers in building materials could be
| brought into the show. Dealers, sub-contractors
and union representatives could pick up fatter
profits by a mutual squeeze-out Of competitors.
Pressure Groups Displeased
Under pressure of the antitrust prosecutions
the combinations melted in Pittsburgh and in
Washington, D. c., among other places. Indict-
ments against building racketeering operations
have been brought in eight cities. The anti.
trust division under Arnold planned to bring
in as many as two dozen more. Fines have
more than paid the cost. Arnold asked for a
him $50, 900 less than last year. .
Part of Arnold's trouble was that his per.
Torrance had created pressure groups. The
AFL, whose unions have been most affected,
demanded the inquiry be dropped. Contractors
too, have voiced protests. In election years,
such pressure groups can make themselves felt.
BY contrast, J. Edgar Hoover gets his re.
| quests without interference of pressure groups.
Guilds Of kidnapers can't lobby. And congress
these days is seeing two spies In every tele.
phone booth,