Evening star., 1941-02-10

lighter tn n
Jay Franklin. aluminium and
superior for purposes Of alloys and
for the manufacture of aircraft.
The principal American producer
of magnesium is Dow Chemical
indicted with Alcoa The Govern
ment contends that the conspiracy
in restraint of trade" involves Alcoa
with the big German dye trust TO
limit production In this country.
AT the time, the defense counsel
objected to evidence on magnesium
On the ground that it was another
case.
So now the Government has
obliged with a new indictment OF
Alcoa for its magnesium policy.
while the Federal court in New
York is considering its verdict IN
the aluminium case.
One of the first reactions 10 the
new magnesium indictment seems
to have been the purchase by Alcoa
of the half interest in the American
Magnesium Corp, formerly owned
by the General Aniline e. Film
Corp. (alSo indicted with Alcoa for
monopolizing the key metal of avia-
tom. A. NJ. c. is manufacturing
rather than a producing corpora
ton and its acquisition by Alcoa as
a wholly owned subsidiary simply
tends TO dissociate the latter from
the German dye trust. 1t does not
touch the basic problem Of using
magnesium as a metal in itself as
the Germans have done--rather
than as an alloy for aluminium as
has been the practice over here.
Big Deposits Near Grand Coulee.
In the meantime. there are huge
magnesite deposits near Grand Cou-
lee which can be developed by new
electrolitic processes developed in
Washington State University. using
Bonneville power. This would cut
the cost of magnesium far below ths
price now charged by Dow Chemical.
which extracts the metal from brine
in Michigan deposits.
The background Of the case. how
ever. remains the fact that alum
mum production-with or without
magnesium-is insufficient for
large airplane program. The goal Of
the Defense Commission is so 900
planes year. This involves produc-
ton Of aluminium up to about 800,-
900 900 pounds. Yet in 1899. with
Alcoa producing at nearly 100 per
cent capacity, the total production
for all purposes-potS and pans. as
well as aircraft and machinery-was
under 100000 900 pounds. This. the
Government contends, jeopardizes
our national defense and is due to
Alcoa's policy of limiting produc-
ton and maintaining high prices for
metal which should be nearly as
cheap as steel. To which Alcoa re-
joins that 8OO0O0.00O pounds IL
purely a hypothetical figure and
that as more aluminium is needed
Alcoa will expand its production
facilities.
In the course Of the first trial IL
was brought out that the aluminium
monopoly dates back to about the
turn of the century. Alcoa had q
Canadian subsidiary - Northern
Aluminum-but diveSted itself OF
control by a consent decree in 1912.
In 1923 Alcoa created the Canadian
Aluminium, Ltd, TO which it trans
ferred 33 subsidiaries. In 1881 a
world aluminium cartel-or trust
was established at BaSle. Switzer-
land. the Alliance Corp. Alliance al
lotted production quotas to different
national monopolies. In 1884. when
Germany began to rearm. the Ger
man company got a larger quota
than allowed under the world agree
ment. So the Germans became the
largest aluminium producers in the
world.
L. s. Market for AIcOa.
Thanks 10 this cartel the Euro
pean producers we've forbidden to
sell aluminium in the United States
The entire American market was re-
served to Alcoa. In 1882 a price ar
rangement was made for cartel
aluminium to sell in the United
States for 17,2 cents per pound, plus
cents tariff, plus freight, etc,
while AlCoas price was net at IS
cents pound-a price which auto
matically gave Alcoa its monopoly.
Government figures on Alcoas net
profit on the cost of producing the
virgin aluminium show that this Ar
rangement was very advantageous
financially to the majority stock
holders of Alcoa, Andrew Mellon.
r. B. Mellon and Arthur V. Davis
These profits were IS per cent in
1882, 80 per cent in 1884, 95 per cent
in 1896 and l04 per cent in 1897.
After 1t was announced that ths
R. F. c would lend money to tn.
Reynolds Metal Co. to enlarge in
dependent facilities for aluminium
production Alcoa cut deliveries NJ
aluminium to Reynolds TO about sn
per cent of the latter's needs for
defense and civilian purposes.
In December. 1910, Northrup Air.
craft, Inc, of Hawthorne, Calf.
announced a 20 per cent reduction
in hours of operation due to alum
inum shortages.
That is why the Justice Denart.
ment expects plenty of fireworks to
develop when its magnesium case
comes TO trial.