"Economic States"

Ever since Joseph O'Mahoney remarked during the Court Fight: "Mr. President, have you ever considered how history will regard your position on this bill?" the Wyoming Senator has been persona non grata at the White House. Last week Washington gossip was that the Administration group in the Temporary National Economic (Antimonopoly) Committee had definitely swiped control from Senator O'Mahoney. At least the committee last week sent out a batch of subpoenas without Chairman O'Mahoney's knowledge. Nonetheless, Senator O'Mahoney is still TNEC's titular chief and when he rose before the New York Board of Trade for his first complete explanation of his committee's purpose, Business sat up and took notice. Excerpts:

"There are 18 industrial, railroad and public utility corporations in the U.S. with assets of more than one billion dollars each. There are twelve financial corporations in the same class....In each of 22 sovereign States of this Federal Union, according to the World Almanac for 1938, the assessed valuation on real property was less than one billion dollars....In each of 16 States the total valuation of all property subject to general property tax was less than one billion dollars....The assets of each of those giant corporations are subject to authoritarian control by the corporate managers while the control a State exercises over the property within its boundaries is rigidly limited....Each of these corporations has an influence that is national and even international in its scope....They are economic states...."

Ignoring the argument that ownership of these giant corporations is generally scattered among millions of investors in many States, Speaker O'Mahoney then quoted President Lewis H. Brown of Johns-Manville Corp. Before the International Management Congress Mr. Brown recently remarked that management no longer represents a single interest but must include shareholders, jobholders, customers and the public. This attitude, said Joe O'Mahoney, was "enheartening." But he felt that even enlightened management could not be trusted to reorder the economic states.

"If we must have a planned economy it must be planned by public authority, but perhaps it is not necessary to have it at all. Perhaps we can still find a formula which, in the basic industries at least, will eliminate the evils of destructive competition while securing an adjustment that may be expected to stabilize employment and mass purchasing power. The search for such a rule is the task which has been committed to the Temporary National Economic Committee."

Reactions of Business to this were for the most part grudging acquiescence tempered with considerable confusion which the New York Times best expressed: "It would be odd indeed if an inquiry which began by attacking the evils of monopoly should end by attacking the evils of competition." Meanwhile, TNEC announced that its first attack would begin with hearings on November 14 on the patent situation in the glass industry and the proxy battle over the Chesapeake & Ohio Ry, last spring.

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