A MAJOR BULWARK
A Major Bulwark THE devastating indictment of wartime profiteering by a Senate Finance Committee minority made up of Sens. Walsh, Connally, Lucas, and La Follette appears to have accomplished...
...Usually he does it in a suave and unctuous manner which smears over with such words as "liberalism" the slimy shenanigans of his heroes...
...Of course when you are running an educational show with a take of more than $230 millions, you can't be too choosy about your sponsors, but it's pretty rough on youngsters who still have some ideals to be told that the memories of Carnegie and Rockefeller and the cruel system which they built are "the America which we are called upon to defend" as Butler puts it...
...Some of the errand boys for organized wealth, like the fat and torpid Milwaukee Journal, complained that while they favored the "principle" of renegotiation and the recapture of excess profits, they demanded weakening of the present law in order to permit corporations to accumulate reserves for the postwar transition...
...The lament that the present law prevents corporations from achieving the thoroughly laudable goal of accumulating a nest-egg for an uncertain future is based on distorted evidence...
...Walsh, Connally, Lucas, and La Follette appears to have accomplished wonders in mobilizing public opinion against the powerfully organized and well-heeled campaign to get Congress to emasculate the renegotiation law...
...The report of the Committee minority drew fire from certain spokesmen for corporate wealth who are out to torpedo the renegotiation law...
...Since the memory of man runneth not to the contrary, Butler has been a faithful servant of the Fat Boys who make up his donors and trustees...
...The Federal Power Commission used this formula as the basis of its recent order to the Hope Gas Company to reduce its rates...
...Statements like these from conservative, corporation-minded publications confirm the conviction that business is doing handsomely in piling up reserves under the present law...
...This formula allowed the utilities to base their rates on valuation arrived at by computing the cost of reproducing the entire plant without taking into consideration the accumulated depreciation of the plant—which depreciation, incidentally, had already been charged off against gross revenues as operating expense...
...Certainly no taxpayer who reads the minority report of Sens...
...Brandeis stood stubbornly and often alone for a standard of valuation in rate making cases that would protect the consumer from excessive profit taking...
...The renegotiation law enables such multi-billion dollar government buyers as the War and Navy Departments to re-open negotiations over war contracts when there is reason to believe that excessive profits had been allowed...
...nearly all are setting up large reserves out of their wartime profits...
...Two Striking Careers NICHOLAS MURRAY BUTLER, head of the educational cartel that is Columbia University in the City of New York, reports that business has been good at the Morningside stand...
...The Supreme Court upheld the FPC in a five to three decision...
...Far more honest spokesmen for American financial and industrial interests have been refreshingly frank of late in pointing out how well corporations are doing in getting ready for rainy days ahead...
...Similarily, Poor's Investment Advisory Service reports: "Wartime earnings are holding up better than was generally thought possible a year ago...
...The Guaranty Trust Company of New York, for instance, calls attention to a Treasury report which reveals that even after paying record-breaking dividends, corporations have kept back more than 12 billion dollars during a four-year period—"a substantial base for postwar growth...
...This year of reaction he is more frank...
...Those who know their labor history will recall the brutal massacre of Carnegie's steel workers at Homestead, Penna., in 1892...
...Against this formula Brandeis pressed his yardstick of "prudent investment" which determined valuation by what the utilities had prudently invested, less depreciation...
...Barron's Magazine, which represents a Wall Street viewpoint, tells us that "the extent of improvement [in profits] in a good many instances is obscured by heavy reserves...
...Especially in his selection of the adjective "striking...
...The ideal industrial life of the United States," he writes, "is typically represented by the striking careers of Andrew Carnegie and of John D. Rockefeller...
...Regularly he pays them off by urging his students to follow in the footsteps of the man-eating tigers who were the pioneer "free enterprisers...
...Walsh, Connally, Lucas, and La Follette, and especially the citation of 200 war-fattened corporations, can escape the conclusion that the renegotiation law is a major bulwark against unbridled profiteering by war contractors and should be retained without crippling amendments...
...The old boy slips a bit...
...Moreover, most companies are doing much better than their published reports indicate...
...Although the decision constitutes a notable victory for the principles of regulation advocated by Brandeis, those who are acquainted with the tricky devices and stalling tactics by which the power trust has thwarted effective regulation will recognize that the major obstacles still remain, and that just and reasonable utility rates will only be realized under public ownership of utilities...
...In his annual report he announced with gusto that the capital resources of Columbia and its affiliated institutions are $230,346,430.39...
...As for Butler's other hero, John D., the screams of women and children burned to death at Ludlow, Colo., in 1914 during a strike of the Rockefeller coal-miners, drown out in the ears of many the clink of conscience money which the hoary reprobate finally coughed up...
...The fact that Andrew Carnegie was grouse-shooting in England and so avoided implication in the smashing of the steel workers' union by the introduction of armed Pinkertons does not serve to clear up in the minds of any laborite the foul blot on his name...
...A Notable Victory THE historic decision of the United States Supreme Court in the Hope Gas Company case handed down last week constitutes, in effect, a welcome, though belated, vindication of the late Justice Louis D. Brandeis and the principles of utility valuation which he championed during his long and distinguished career...
...Although the word "renegotiation" has a forbidding sound, it actually describes a simple process...
...In his incisively written dissents he argued brilliantly against the so-called "reproduction new" yardstick which the utilities so passionately advocated and which the reactionaries on the court invariably supplied...
Vol. 8 • January 1944 • No. 3
