Anti-Monopoly

Last year Harold L. Ickes and Robert Houghwout Jackson handed U. S. Business the Administration's Christmas greetings in the form of a pair of diatribes about "economic oligarchy" and "the 60 families." Implication was that they would be followed by a similarly vehement message from the President to Congress, suggesting revision of U. S. anti-trust laws. Anxiously awaited by Business ever since, the business monopoly message from the nation's greatest governmental monopolist finally appeared last week. A detailed request for Congressional investigation of the whole subject of monopoly as a preliminary to future legislation to curtail it, it was chiefly noteworthy for a tone as mild as Messrs. Ickes & Jackson had been bitter.

Simple Truths. Read to Congress the day after Governor La Follette's launching of a new party in Madison, Wis. (see p. 12), the President's message opened with some strikingly similar themes:

"Unhappy events abroad have retaught us two simple truths about the liberty of a democratic people. The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic State itself. That, in its essence, is fascism--ownership of government by an individual, by a group or by any other controlling private power.

"The second truth is that the liberty of a democracy is not safe if its business system does not provide employment and produce and distribute goods in such a way as to sustain an acceptable standard of living. Both lessons hit home. Among us today a concentration of private power without equal in history is growing."

Statistics. To prove his point that current concentration of economic power is unexampled, the President quoted familiar statistics from reports to the Bureau of Internal Revenue: 1) .1% of U. S. corporations own 52% of all corporate assets, get 50% of all corporate income, less than 5% of U. S. corporations own 87% of the assets and less than 4% of manufacturing corporations get 84% of their net profits; 2) even in 1929 .3% of the population got 78% of the dividends and 3) in 1936, 33% of all inheritances went to 4% of all heirs. Taking this as premise No. 1, the President proposed as premise No. 2 that the concentration was due to monopolistic trends in U. S. business. His conclusion was that "a thorough study of the concentration of economic power in American industry and the effect of that concentration upon the decline of competition" should be undertaken by the Federal Trade Commission, Department of Justice and Securities & Exchange Commission, for whom he recommended appropriating $500,000. In addition, the President requested $200,000 more to enable the Department of Justice--whose Assistant Attorney General Thurman Arnold (The Folklore of Capitalism) was last week telling a New York audience about his plan to publicize antimonopoly prosecutions--to enforce existing anti-trust laws.

Homework. List of subjects which the President proposed Congress investigate: 1) Improvement of anti-trust laws by placing the burden of proof of innocence on those charged with certain violations, such as presenting identical bids, uniform price raises; 2) more careful scrutiny of mergers and interlocking relationships; 3) supervision of investment trusts and gradual separation of banks from holding companies; 4) supervision and publicizing of activities of trade associations; 5) amendment of patent laws to prevent use of patent controls for suppression of new inventions; 6) correction of tax laws to encourage competition and dividend distribution. To top all this the President also suggested that Congress consider creating a Bureau of Industrial Economics, modeled on the Bureau of Agricultural Economics, to keep business informed on supply and demand variations throughout the U. S.

"Men of Good Faith." Noteworthy in all the President's recent discourses to or about business since he recognized Depression* last month has been a gentle and conciliatory tone. Last week's message was no exception.

"No man of good faith will misinterpret these proposals. . . . [The program] is not intended as the beginning of any ill-considered 'trustbusting' activity which lacks proper consideration for economic results. It is a program to preserve private enterprise for profit by keeping it free enough to be able to utilize all our resources of capital and labor at a profit."

*A recent Gallup poll on the subject showed that 58% of its respondents considered Depression more accurate than Recession as a description of the current state of U. S. business.

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