BREEDING THE NEXT WAR

Follette, Sen. Robert M. La Jr.

Breeding The Next War By SEN. ROBERT M. LA FOLLETTE, Jr. ONE of the momentous postwar policy decisions facing America and the rest of the world will be the determination of the international trade...

...He opposed the motion on the grounds that the company should be free to follow whatever course might be desired by the Federal Government...
...It thrives on scarcity...
...They want to stimulate greater production, and move toward a higher standard of living for all peoples everywhere...
...The production of aircraft is one of the most vital phases of national defense...
...But he refused to accept a modification of the motion to the effect that Standard Oil would not "enter into cartel arrangements after the war with I. G. Farben unless compelled to do so by the United States Government...
...Tungsten carbide, or carboloy, is the essential ingredient in the cutting tools needed in those machine tools...
...Secure in its control of the industry, it restricted the production of aluminum to the point where Germany was outproducing us by 37,000 tons even in 1938, the year before the war broke out in Europe...
...ONE of the momentous postwar policy decisions facing America and the rest of the world will be the determination of the international trade pattern...
...They want to parcel out trade territories, stifle competition, resist technological progress, and restrict production...
...The national defense emergency revealed these shocking shortages of vital materials essential to our war industries...
...This monopoly was the result of over 50 years of ruthless extermination of its competitors...
...The cartel arrangements of the duPont Company with I. G. Farben have been put on ice for the duration of the war, but its cartel agreement with the Imperial Chemical Industries of Great Britain is still in full effect...
...Standard Oil And Farben The Chairman protested he was not in favor of cartel arrangements...
...The domestic monopoly is a. menace to free enterprise and the economic welfare of the nation...
...Even in 1940 the maximum price was still $205 per pound...
...America's supply of the kind of machine tools most capable of cutting steel were tragically underdeveloped, largely because of executive prices charged by General Electric and its subsidiary, the Carboloy Company, for tungsten carbide...
...The excessive prices charged for tungsten carbide in this country were buttressed by an agreement entered into between General Electric and Krupp in the late 1920s...
...Other companies, not so Well known to the general public but just as active in cartel practices, are definitely committed to the resumption of their prewar cartel agreements as soon as the termination of hostilities will permit...
...The monopoly-international cartel is not dead...
...The aim of both is to control and restrict production, divide world markets, control prices, and reap excessive profits...
...Alcoa had a domestic monopoly of aluminum production when the war broke out...
...It strangles equality of economic opportunity...
...We know from court and Congressional Committee records to what an extent domestic monopoly corporations with international cartel relationships dominated the production and sale of many basic commodities throughout the world before the war...
...This agreement provided that Krupp would observe General Electric's right to control the price in the United States, and any tungsten carbide imported into this country by Krupp would be sold at the same price...
...In the meantime, the Nazis were producing 12,000 tons a year—three times as much...
...Magnesium and aluminum are both highly critical materials in aircraft production...
...A stockholder presented a motion to the effect that the Standard Oil Company of New Jersey should not resume cartel relations with I. G. Farbenindustrie, the giant German trust, after this war...
...This shocking chapter in the history of American monopoly corporations' relationships with the rest of the world must put the American people on guard for the future...
...The Government was forced to build new plant facilities and to convert fabricating facilities to the use of these materials which had been discouraged over the years by the high price-low production policy of the monopolies at home and their cartel affiliates abroad...
...In a recent statement presented to the Senate Subcommittee on War Mobilization, Corwin Edwards of the Anti-Trust Division called attention to what transpired at the annual meeting of the Standard Oil Company of New Jersey last June...
...It is a breeder of wars...
...Nothing would be more likely than that they will attempt to resume cartel relationships at the earliest opportunity...
...The story of aluminum is similar...
...This caused months and months of delay in the rapid expansion of the national defense program...
...Although the manufacturing cost of this material is estimated at about $8 a po.und, the sale price ranged from $225 to $453 prior to the war...
...Powerful forces at home and abroad are striving to bring about the strengthening of the cartels' stranglehold on international trade...
...The United States suffered from their activities...
...Upon the record as made the American people should determine never to let this happen again...
...An international monopoly is a menace to the rights of peoples everywhere and the economic welfare of the entire world...
...THE American people know the cost and the consequences of monopoly at home...
...These schemes violate the American concept of equality of economic opportunity...
...Germany used approximately 22 times as much tungsten carbide in its industry per unit of steel produced than did the United States in 1936...
...No self-respecting nation can longer tolerate private trade agreements between international corporate giants which throttle the full development of its economic strength...
...Already plans are being advanced for even more sweeping and more complete domination of world markets in the postwar world than before...
...Later, when a prosecution under the anti-trust laws was in progress, the price came down to less than $50 per pound...
...Yet, in spite of that fact the production of magnesium in the United States was limited to a mere 4,000 tons a year under an agreement between the Aluminum Company of America and I. G. Farben...
...They can only be put into operation at the expense of the peoples of the world...
...At the same time it became apparent there was a shortage of production facilities as well...
...Cartel methods on an international scale are essentially similar to those of monopolies on a national scale...
...the parties should enter into new negotiations in the spirit of the present agreement and endeavor to adapt their relations to the changed conditions which have so arisen...
...DuPont, Alcoa, Standard Oil of New Jersey, and many other powerful industrial dynasties in this country were either directly or indirectly tied up with international cartel arrangements before the war...
...The fact remains that the agreement between Standard Oil Company of New Jersey and I. G. Farbenindustrie of Germany in 1930 provided "in the event the performance of these agreements . . . should be hereafter restrained...
...The monopoly-cartel control of world trade will condemn millions of people to an unconscionably low standard of living...
...It will stifle the rights of people everywhere to develop their natural resources for their own good and their country's good...
...But he vigorously opposed this stockholder's motion and defended Standard Oil's past relations with I. G. Farbenindustrie...
...The American production of such vital war materials as aluminum, magnesium, and synthetic rubber, prior to our entry into this war, were restricted by international cartel agreements between domestic monopoly corporations and foreign producers, many of them German...
...The economic and social consequences of such activities on an international scale are not limited to overcharging the consumer...
...Opposed to these forces are those who insist on competitive trade encouragement for the development of natural resources throughout the world...
...They have not only used their combined resources to destroy independent competitors, but they have actually crippled the development of vital materials through their restrictive agreements...
...Prewar cartel ararngements are for the most part in a state of suspension because of the war...
...It constitutes one of the dangers to the future peace and plenty of the world...

Vol. 8 • May 1944 • No. 21


 
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