Evening star., 1940-08-02

Allll- IuSG blVl- lk3k$ ##:$a -l-
sion of the JUS
tice Department., David Lawrence.
which Is about to launch a most
sweeping attack on the entire oil
industry. Everybody is agreed that
fuel is the most important commod-
ity in a defense program and that
every producing and distributing
company should be kept at the high
est state of efficiency. But at this
crucial moment in the industrial life
of the Nation, the Justice Depart
ment has made plans to change the
entire setup in an industry which is
second only to the railroads IN the
amount of capital invested.
1t is easy enough to prove, OF
course, that a civil action in the
courts will not disturb the supply OF
gasoline to market right away, but
it is not this interference which will
cause embarrassment. 1t is the TACT
that the major companies are not
going to be able to do any planning
of new resources and new facllltleS,
when they do not know what capital
structure is to be permitted here
after or how new capital can be
raised under a plan that calls Tor
disintegration.
Separation Seen as Objective.
The general report here is that
the department intends to ask the
courts to separate producers from
distributors and pipeline companies
from oil producers. The fact that
the consumer gets his gasoline
cheaper than ever before despite
taxes and the fact also that even
with integrated companies, the aver
age return on net investment Tor
the oil industry is in the nelghbor-
hood of only 4 per cent does not
seem to dissuade the department eX-
perimentahsts from invading per-
haps the most efficiently managed
and operated industry in the whole
country.
Some weeks ago it was asserted
that businessmen would hesitate TO
do business with the Government
wherever cooperation between COM
petitors was essential for national
defense because the Justice Depart
ment had filed prosecutions against
men who, under the impetus OF Gov
ernment suggestion, had collabo-
rated.
Today the discussion here is how
IN reaSslIre business that it will not
run afoul of the antitrust laws If 1t
does what such institutions as the
Council of National Defense asks
them to do. All sorts of plans for
the issuance of certificates OF i'm
munity have been suggested, but the
fact remains that nobody can pro-
tect the businessmen against un-
warranted prosecution except Con-
gTess by specific resolution.
Laws Suspension Suggested.
It would be a simple matter for
Congress to pass a resolution sus-
pending the operation of the Sher-
man antitrust law during the
emergency period or for one year
1t happened during the life of the
N. R. A and the country didn't
suffer. The Federal Trade Com
mission could continue to take care
Of unfair competition.
What seems to be most difficult is
what to do with an Antitrust Divi-
sion, which has received $4,000, ,000
appropriation and seems to feel 1t
must justify that appropriation by
wrecking the capital structures OF
nearly every important major in
dustry. The department has put its
claws into the oil, milk and tobacco
Industries and has plans for some
of the others. A policy has been
adopted which processes to be in the
interest of the consumer, yet nearly
every plan for breaking down big
companies into smaller units would
seem to involve the payment by the
consumer of heavy tribute to middle
men and to companies that must
arise to take care of services hitherto
performed by integrated companies
Carried to its logical conclusion, the
policy of the department implies
that farmers must not set up selling
stands on the roadside, but must
stick to production alone and that
the producer of a commodity can
have no part in marketing it, In
the end, the consumer pays higher
toll for such inefficiency in distribu-
ton.
A Legal Blitzkrieg.
The New Deal administration has
not played fair with industry For
the last seven years it has had
ample opportunity to set forth a
constructive policy with respect to
the antitrust laws. More than
$2,000,000 was spent by the tenn
potary National Economic Commit
tee to get the facts about the con-
centration of economic control in
America. No recommendations have
yet been made and the administra-
ton has not put forth it's answer or
its solution. Now comes blitzkrieg
of criminal and civil prosecutions
at time of international crisis.
Until the New Deal has a plan to
handle the antitrust situation
which can be passed upon by Con-
gress, the unwisdom of placing a
$4,000 appropriation in the hands
of the largest staff of lawyers ever