Evening star., 1942-03-27
Arnold Urges
Registering Of
Foreign CarteIs
Would Prevent DeuIs
Such as frustrated
Synthetic Rubber
BY the Associated Press.

Thurman Arnold, Assistant
Attorney General, proposed to a
Senate committee today a re-
quirement that in the future all
agreements between American
and foreign industries be regis
tered with a full explanation OF
their purpose set forth.
Mr.. Arnold made the recon-
mendation to the Senate Defense
Investigating Committee as one
means of preventing such cartel
arrangements as that between the
Standard Oil Co. of New Jersey and
I. G. Farben of Germany, which he
previously testified had frustrated
development of a synthetic rubber
industry in this country.
In asking legislation TO supple
pent the present inadequacies Of
the law Mr. Arnold said that dis
closure of the relations between
Standard and I. G. Farben should
be regarded as "a great educational
lesson to the American people"
Il wish to point out and empha-
size" he told the committee, that
Standard Oil is a guinea pig in this
situation II does not stand out
alone. This sort of thing was going
on in large number of American
industries.
Similar CarteIs Cited.
Il do not think it is an extreme
statement TO say that in most of the
basic war materials we find similar
cartel agreement.
Therefore, we would lose the
point of this hearing if the commit
tee simply denounced Standard Oil.
We need Standard Oil, with its tech
nicians and its organization, to help
us win the war.
BY the consent decree that COM
pany has indicated its willingness to
make restitution in the sum of mil
lions of dollars and at the cost of its
future domination of the industry.
We may we'll be grateful to that
company for putting its arrange
ments in writing and thus to furnish
an object lesson of the results of in
ternatlOnal cartelS.
Mr. Arnold told the committee
that the synthetic rubber arrange
mentS were not entered into with
any desire TO aid or assist Germany.
The sole motive was an attempt on
the part Of the Standard Oil to get
a protected market and to eliminate
Independent competition. and finally
to restrict production in world mar
ketS in order to maintain that
control"
He said there is essentially no
difference between what the Stand
ard Oil Of New Jersey has done in
this case and what other companies
did in restricting the production of
magnesium, aluminium, tungsten
carbide, drugs, dye stuffs and a
variety of other critical materials
for the war"
Mr.. Arnold's testimony Yesterday
gave a picture of Germany's mecha-
nized divisions rolling along on syn
thetic rubber made by an exclusive
American process-a process which
he said Standard had denied to
American manufacturers almost
without exception.
Near Treason, Truman Says.
Il think this approaches treason"
was the comment Chairman Tru-
man of the committee made on this
situation.
Continuing his testimony today,
Mr.. Arnold said:
The importance of this hearing
lies in formulating a constructive
program to eliminate the kind OF
practices here set out. not in Stand
ard Oil, which has paid the penalty,
but III other basic industries.
1t is obvious that this kind of
practice on an extended scale
throughout industry has been one
of the causes why we are short of
basic materials. If it continues. it
Will contribute to ineff1ciency of
production throughout the war. If
1t continues after the war 1t will
keep us in continuous state OF
unpreparedness."
To stop repetition of the cartel
system In America, Mr.. Arnold
made these recommendations:
Il. The Government should
encourage, either through its
own agencies, through universities,
through foundations, or through
subsidies to private industry, re-
search which would lead to i'm
provements in basic processes, which
Improvements would be available to
all.
Would Register Agreements.
% Private research should In
no way be discouraged. However,
the patent system should not be
permitted to impede the progress
of science and the useful arts.
"3. All patent license agreements
(See RUBBER, Page Aid