Competitors for Alcoa

The longest law suit in the history of U. S. Federal Courts was drawing to a close last week. After 26 months of trial, both sides prepared to rest their cases in the Government's anti-trust case against Aluminum Co. of America. The 40,000 pages of testimony, ranged along 15 feet of shelf space (plus another twelve feet for exhibits), contained the evidence for and against the Government's charges: 1) that Alcoa monopolizes 100% of U. S. capacity for smelting bauxite ore into aluminum ingots; 2) that it monopolizes 90-95% of the U. S.'s scanty bauxite deposits; 3) that through a "stooge" associate, Canada's $80,000,000 Aluminium Ltd., Alcoa controls world production and prices. These controls, claims the Government, have caused a stringency in aluminum production that may interfere with national defense.

Aluminum's answers: apart from a 270% increase in 1914-16, and modest 1-c-increase in 1937, its price record includes cuts in the inflated 1925-29 period, two more cuts since the suit began--the second last week by 1-c- a Ib. to 18-c-, the lowest price ever. As for the bauxite monopoly, Alcoa pointed to plenty of uncontrolled low-cost ore in Surinam (Dutch Guiana), high-cost ore in Arkansas. As for national defense, Alcoa pointed to $26,000,000 worth of plant expansion in 1937, $30,000,000 worth last year. As for the ingot monopoly, Alcoa's claim has always been that anyone was at liberty to compete, but few had ever tried. Last week, in the nick of time to strengthen Alcoa's case, an ingot competitor hove into view.

Reynolds Metals Co. of Richmond, Va.. is a rich maker of metal foil whose boss, Richard Samuel Reynolds Sr., is a nephew of the founder of R. J. Reynolds Tobacco Co. (Camels). Also a fabricator of aluminum sheet, rods, tubing and extruded shapes, Reynolds Metals imported about half of its virgin aluminum from France until war interfered, has since been a reluctant Alcoa customer. Last week, having arranged to get bauxite from Dutch Guiana, Reynolds got approval of a $15,800,000 RFC loan to build ingot smelters, probably in Alabama. Ingot smelters consume electricity the way a St. Louis bleacher crowd uses pop on a hot day. Like Alcoa's own main furnaces, for which Franklin Roosevelt signed a $68,500,000 TVA expansion bill last week, Reynolds will get its electricity from TVA. Reynolds Metals called its project "our contribution to national defense," claimed to be aiming for an eventual ingot production of 60,000,000 Ib. a year, which is 20% of that of Alcoa itself.

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