Monopoly Spoor

Assistant Attorney General Thurman Arnold fortnight ago intimated that the Government was likely to restrict advertising on the ground that it sometimes fostered monopoly (TIME, Nov. 21). Last week he backed down. Obviously embarrassed by the sensation which his comments on advertising caused, Trust Buster Arnold wrote Advertising & Selling that it was all a misunderstanding, that regulation of advertising was the job of industry, not of the Department of Justice.

If this meekness on the part of the New Deal's most militant crusader led businessmen to think that a new day had dawned, they were speedily disabused. Not only did the Federal Communications Commission last week begin hearings on monopoly in radio but Thurman Arnold's Department of Justice revealed that it was sniffing monopoly spoor in the building-trade industry; and in Chicago Mr. Arnold's bloodhounds treed the biggest monopoly catch since the oil industry went on trial in Madison year ago--the milk and ice cream industry.

In 1937 milk provided the U. S. farmer with $1,500,000,000, 18% of his income, was thus the most important of all farm products. But since the cow's biological apparatus produces an oversupply in the spring and a scarcity in winter, milk prices tend to fluctuate wildly. This, plus the sanitary necessity of supervising milk distribution, has long made some sort of co-operation inevitable between producer and distributor. It usually takes the form of so-called "milksheds" developed around urban centres.

Persuaded that there is "substantially complete control over the industry by a few large distributors," Trust Buster Arnold last July launched a grand-jury investigation in Chicago. Last week two criminal indictments under the Sherman Act resulted. One charged 14 corporations and 43 individuals with conspiracy to fix prices and control the supply of liquid milk in the Chicago area. The other charged 20 corporations and 20 individuals with a nationwide conspiracy to restrain the sale and use of counter-freezers with which retailers, hospitals, schools, etc., could make their own ice cream.*

Not merely the usual legal attack on Big Business management, the milk-trust charges encompassed union activities and ran the gamut from price-fixing to tales of arson, flogging and stench bombings. Chicago was picked as the locale for the trial because these factors made it represent "in extreme form" what the Department of Justice terms a nationwide milk "situation."

*Among the defendants were Borden Co., publicity-loving Dr. Herman N. Bundesen who is president of the Chicago Board of Health, National Dairy Products Corp. and the International Association of Ice Cream Manufacturers.

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