Evening star., 1942-03-26
Arnold Assai|s
Standard Oil in
RubberShortage
Synthetic Process
Given to Germany,
He Tells Senate
By the Associated Press.

By the Associated Press.
Assistant Attorney General
Thurman Arnold testified today
that the Standard Oil Co. Of New
Jersey had developed a synthetic
rubber that was cheaper, better
and more plentiful than any the
Nazis had and had turned it
over to German interests before
the United States entered the
war.
Mr. Arnold told the Senate De-
fense Investigating Committee that
until a consent decree entered into
yesterday, Standard had held back
even in this rubbr shortage" in max
ing the patents on the synthetic
product available to American rub
Der companies.
Production "Stif1ed."
When Mr.. Arnold read documents
he said showed Standard had
"stif1ed" the production of synthetic
rubber in this country, Hugh Fulton,
committee counsel, asked:
Then Standard developed syn
thetic rubber in this country that
was cheaper and more plentiful
than Germany had?"
That's right" Mr.. Arnold re-
piled.
And turned it over to Germany"
Mr.. Fulton inquired.
That's right" was the reply.
And not to our own rubber COM
panies?" Mr. Fulton asked
That's right" Mr.. Arnold said.
Lashes at Motives.
The Assistant Attorney General,
who is chief Of the Justice Depart
ment's Antitrust Division, pre-
vlously had testified that cartel ar
rangements between Standard and
the l. G. Farben-Industrie of Ger
many ARE the principal cause Of
our present shortage of synthetic
rubber"
Mr.. Arnold said. however. that
these arrangements were not en-
tered into with any desire to aid or
assist Germany"
Inc sole motive he said, was
an attempt on the part of the
Standard Oil to get a protected
market to eliminate independent
competition. and finally to restrict
production in world markets in order
to maintain that control"
Mr.. Arnold said Standard Oil
correspondence disclosed that its
product, Butyl, was satisfactory for
making inner tubes and could be
used in producing outer tires.
He said 1t could be produced more
cheaply than natural rubber, adding
that Standard had offered to make
some agreements with rubber COM
panles which precluded their using
the product in tires and confined
their use of it to the high-priced
speciality field because of the roy
alties they would have to pay.
The witness read into the record
letter to a Standard Official in
which Philip Reed, chairman of
General Electric, was quoted as say
ing his company was ready to ac-
cept an agreement on butyl rubber
similar to one into which the Fire
stone Rubber Co. had entered.
Firestone Head Start"
Mr.. Reed was quoted as pointing
out that Flrestone had three
month head start" over industry
in general in obtaining the patented
process, adding that General Elec-
trio would have only about six or
seven weeks if Standard went
through with its plans of distribute
ing samples on September Is, 1910.
Chairman Truman broke in to
observe that this letter was writ
ten in July. 1910, at time when one
group within the Office of Produc-
ton Management was attempting
20 get started synthetic rubber pro-
duction program in this country.
He asked Mr.. Arnold whether Mr..
Reed was not now an official of the
War Production Board and when
the witness replied in the affirma-
tive, Senator Truman inquired if Mr..
Reed had been questioned why Gen.
eral Electric wished to obtain a
head start" on others.
Mr.. Arnold said Mr.. Reed had not
been approached about the question
and Senator Truman remarked
that the w. P. B. official would be
called before the committee later
for interrogation.
Ended by Consent Decree.
The agreements between Standard
Oil and the German dye trust were
ended by a consent decree an
nounced yesterday in which the
company agreed to free to American
industry its patents on synthetic
rubber.
The company. six subsidiaries and
three top officials were fined a to-
tai of $4,000 for violation of the
antitrust law. They pleaded nolo
contendere.
Mr.. Arnold said he wished the
case to be considered not as one
which singled out the Standard Oil
Co. OF New Jersey but as a dra-
matte Illustration of the vicious
ness Of an industrial practice that
restricts production in order to
dominate the market"
Calls for End of Cartels.
Such practices" he told the COM
mittee. must not be allowed to con-
tinue because they directly hamper
war production. I'VE must uncover
these practices during the war when
they are hurting us - They must
not be allowed to be reinstated after
the war or we will find ourselves
in the same situation all over again.
Mr.. Arnold said that there was
essentially no difference between
what Standard Oil has done in this
case and what other companies did
in restricting the production of mag
nesium, aluminium, tungsten carbide,
drugs, dye stuffs and a variety Of
other critical materials vital for the
war"
$50 long as such cartel agree
ments continue to exist" he added.
"the inevitable result will be short
ages in essential materials.
Nation Left Dependent.
Not only is production restricted,