LA FOLLETTE'S COMMENT
Follette, Robert M. La Jr.
La Follette's Comment Power Trust Seeks to Circumvent Intent of Congress on Boulder Dam—Dye Monopoly Being Fostered by American Valuation By Robert M. La Follette Jr. THREATENED NULLIFICATION OF...
...E Johnson...
...Business men, leaders in the chemical industry, have been liberal contributors to party campaign funds...
...They are betraying the public, hy stating half I nit lis, so they are nexer wise to facts...
...It now appears that Secretary of the Interior Wilbur, close friend of President Hoover, is seeking legal authority to nullify the intent of congress and to give all or part of the power generated at Boulder Dam to the Power Trust...
...Under this system if there is a monopoly of the American production or if the principal producers have a price filing arrangement the domestic manufacturers may actually determine the amount of duty that is lo be paid upon like or comparable articles .imported into the United States...
...I low much I truth there was in this plea is now a moot question...
...The pica cannot be made that American valuation should be maintained on dyes for the benefit of labor...
...r >r ^ AMERICAN VALUATION FOSTERS DYE MONOPOLY WHEN the tariff act of 1922 was under consideration domestic dye-stuff manufacturers, headed by the duPont company and the Allied Chemical and Dye corporation, attempted to secure an embargo against the importation of coal tar dyes and intermediates...
...Today the facts disclose that the need for this special privilege lias gone by...
...The Power Trust fought the Boulder Dam bill with all the*rcsourccs at their command...
...FROM COLORADO [Orover...
...In spite of the great lobby which they had in Washington the attempt failed...
...and transgress the law...
...In 1921 the Allied Chcmicjl and Dye Corporation had net earnings of $7,646,910...
...The Republicans and Democrats alike have been the beneficiaries of these contributions from the chemical crowd...
...in machinery 24 per cent, and in lumber 26.9 per cent...
...It invade...
...in leather 19.4 per cent...
...There have been indications since he took office that, he was not unmindful of the help which the power monopoly gave him in 1928...
...A provision in the appropriation bill can be adoptedS which will prevent the use of the money unless the states and municipalities are given the first opportunity to buy the power generated at the Boulder Dam...
...If the American producers get together and fix their prices at exorbitant levels the foreign producer will have added incentive to ship his goods to the American market and, after paying a duty based upon foreign value, he will reap' the profits that excessive price in the domestic market produce...
...1(11 - Kind check for $1.50 sub A long time reader of La Follette* Magazine, I must continue wilh The Progressive...
...Congress has a remedy at hand...
...You Progressives do as I do after you have read it—mail it to some standpat-tern and If there is any conscience left, it will have some effect...
...The Boulder Dam act states explicitly that states and municipalities shall have preference in the purchase of power at the dam if their applications will promote the public interest equally as well...
...A square deal in the sharing of deserts /.miing people must continue to be a very elusive thing with no fixed ."tandnrd measure r( -values, with a money that lelcrs values up and down, here and yon.—Chas...
...In 1 923 the duPont comp.iny had net earnings of $18,312,504...
...Exorbitant prices upon these dyes arc paid ultimately by the consumer in higher prices for the finished products of these industries...
...Under foreign valuation such a complete embargo is practically impossible...
...There can be no question of the intent of congress concerning the sale of power at Boulder Dam...
...It is plain, therefore, that under these circumstances the American producers of dyes and coal tar intermediates arc able to establish what amounts to an embargo and thus effectively shut out foreign competition...
...In a free and open market the prices of commodities vary with the interaction of the economic forces of supply and demand...
...Having created a practical monopoly in trie domestic market, having made fabulous profits and maintained ,a phenominal growth, having invaded the foreign field where it is now capturing markets from the great European chemical companies, the American chemical industry demands thai it be permitted to further exploit the domestic consumer through the device of American valuation...
...10] — 1 have heen a subscriber to La Follette's Magazine for many years and like The...
...It is unjust to force the domestic users of dyes to pas-high prices made possible by American valuation while the very products in which these dyes are used enjoy a,protection on the foreign value basis...
...Thus by raising the price in the United States the domestic dye-stuff manufacturers automatically raise the duty against the foreign made product...
...The opinion from Solicitor Finney, who was so accommodating to Fall when he bartered away the nation's oil reserves, may be interpreted as a step in the liquidation of President Hoover's political debt to the Power Trust...
...According to the American Federation of Labor there are 9,000 wage earners in the chemical industry and they arc receiving less than a living wage as shown by government reports...
...Senator Norris stated on the floor of the senate that the bill never would have passed without the provision for preference for states and municipalities...
...Progressive very much, I am sure that the principle of the Progres-slve will reach a much greater number of readers before long...
...THREATENED NULLIFICATION OF BOULDER DAM ACT THE enactment of the Boulder Dam act was hailed as a victory won by the people against the Power Trust...
...They shouted about the dye industry being a war necessity...
...The chemical corporations are industrial giants even in this j country of giant industries...
...The law provided that the vast electric power to-be generated at the great flood control dam on the Colorado river constructed with the taxpayers' money should be sold by the government and that the preference should be given to states, municipalities and private enterprise in the cjder named...
...The wage cost in the textile industry is 19.6 per cent...
...Fortunately, however, if the President fails to protect the public interest...
...Here is convincing circumstantial evidence of price fixing...
...In 1929 its net earnings were $78,171,782...
...According to the Department of Commerce the labor cost in the dyestuff and tanning industry as expressed in the relationship of wages to the value of products is S.3 per cent...
...An examination of the prices quoted upon these dyes week by week for 1929 discloses the astounding fact that with three exceptions the prices of these 77 dyes have been fixed so that they show not so much as a penny's variation during the 5 2 weeks of last year...
...Senator Johnson and...
...The coal tar dyes upon which it is proposed to continue the special privilege of American valuation arc essential to the cotton, woolen, silk, rayon and a score of other industries...
...However, instead of an embargo they obtained American valuation as the basis of appraisement of tariff values upon those products...
...They have declared that it was the intent of Congress to give the states and municipalities the first chance to buy the power at the Dam...
...Calif, Jan...
...The twin evils of monopoly and price fixing pervade almost every branch of the great American chemical industry...
...It threatens the constitutional liberties of the American people.—E...
...Every phase of the trade is compactly organized with an "institute" or "association" which as everyone knows is one of the favorite devices for facilitating price fixing and control of production...
...No one in cither branch of Congress has questioned the correctness of these statements nor has a single voice been raised in the House or Senate to defend Solicitor Finney's opinion...
...SHOULD TAKE SOME ADS fNorth Hollywood...
...In 1928 its net earnings were $26,962,442...
...For instance, indigo, the blue color used for dyeing overalls and denims, was sold last year to the textile mills in this country for 15 cents a pound, while it was being sold by American dye companies in Canada for 10 cents a pound, or nearly one-third less...
...The Oil, Paint and Drug Reporter is the trade publication which contains authoritative price information concerning chemicals in the United States...
...in paper and printing 18.4 per cent...
...our higher schools and even pulpits...
...Every week it prints the current prices of 77 dyes which together constitute more than three-fourths of all the dyes produced in this country...
...T. Fhiln...
...They said that the American chemical I inchistrv was an infant and that it needed special protection...
...Not only are they meeting the great European chemical corporations in the markets of the world, but they are underselling them...
...In 1921 the net earnings of the Newport company were $ 1 2 1,3 3 9. In 192 8 its net earnings were $685,427, and for the first nine months of 1929 the Newport comp.iny had net earnings of SI,173,952...
...Through the American valuation the domestic dyestuffs industry has in eight years since the Fordncy-McCumbir act w.rs p.issed, obtained 94 per cent of the United States market for their products and arc exporting one-third by poundage of their production to 5 8 countries, including Germany...
...All other commodities imported into the United States pay duty computed on foreign valuer Domestic dyestuff manufacturers therefore enjoy the special privilege of having the imported articles which compete with their products valued for tariff duties upon the basis of the selling price in the United States market...
...I hope that your achievements may reach as far as your good intentions...
...I beg to refer to the Nation, the New Republic, -the Survey—they all have some ads, and I am sure nobody ever thinks that these papers are In any way influenced by their idver'l.scrs.—G...
...Soon the test will come in the Senate which will disclose whether a majority of that body have the best interests of the consumers of this country at heart or whether the majority in the Senate is more interested in the campaign contributions of the chemical giants...
...Examination of the earnings of a few corporations will prove the statement...
...Wmllng...
...13]—As I have been a reader of the La Follette Magazine I am pleased to get The Progressive weekly, Just think, if it could be made Into n dally...
...HERE'S ANOTHER REAL FRIEND [Balaton, Minn., Jan...
...On the other hand, American valuation actually offers the domestic producers a powerful incentive to increase prices to extortionate levels in order the more completely to shut out foreign competition...
...It is to be hoped that he will not sanction the violation of the intent of Congress in the Boulder Dam Act...
...No so in the market for dyes in the United States...
...The appropriations for the Dam must be passed by congress...
...in stone, glass and clay 28.9 per cent...
...However, my object In writing you is to suggest that you accept certain kinds of advertisements, In order to be able to extend the usefulness of your paper, Instead of having to face the necessity of discontinuing publication, eventually...
...Congressman Swing, of California, co-authors of the Boulder Dam bill, have repudiated the opinion of Solicitor Finney...
...The president has repeatedly called upon the people to obey the law...
...The Attorney General of the United States in a recent address to the American Bar association said: "Our material prosperity has been so overwhelming, our business institutions have been increasing in size and number with such leaps and bounds, that I fear that there has been a disposition here and there to go too fa...
...Another example is Alizorinc Brilliant Gjccn, one of the best wool dyes, was sold to woolen manufacturers in the United States at $2.75 per pound and in Canada the price charged for the same American made dye was 90 cents...
...The American valuation for dyes was secured on the plea in 1922 that the great European dye trusts would dump their products in the United States and destroy the American dye industry...
...It fought the bill because the preference provision for the disposition of the power meant that the states and municipalities would have the first chance to buy the power...
...Nullification of the act of Congress providing for the building of Boulder Dam is necessary in order to give the power monopoly what it wants...
...in iron and jtccl 20.4 per cent...
...The dallies and country weeklies arc a boon to plutocracy...
...Colo...
...He has secured an opinion from the solicitor of the department, E. C. Finney, which stripped of its legal verbiage, tells the secretary that he may sell the power to private power i ompanies if he thinks i* would promote the "public interest...
...The substantial majorities in both House and Senate on amendments and the final passage of the bill arc only subject to one conclusion and that is that the Congress intended that the well established policy laid down in the Federal Water Power Act of 1920 was to be followed in the sale of the power...
...President Hoover had the ardent support in the campaign of the Power Trust...
...Incontroverted evidence presented to the Finance committee of the Senate disclosed that the domestic dyestuflf industry is selling its products abroad much cheaper than to the home consumers...
Vol. 1 • February 1930 • No. 10
