"Dull but Important"

The entire U. S. industrial system, "a vast and complex organic growth," was last week laid out on a long slab in the marble caucus room of the Senate Office Building for examination piercing and profound. Lest the gigantic creature cry out or have hysterics, it was at once given a general anesthetic. Senator Joseph Christopher O'Mahoney of Wyoming, chairman of the Temporary National Economic Committee created last spring by Presidential message and joint Congressional action, had already administered repeated injections of soothing reassurance, viz: "This is not a punitive investigation. ... I don't believe in centralized planning." Now were administered three enormous slugs of statistical dope which sent spectators away in droves and made the patient feel that, before having its liver cut out, it was at least going to have its red corpuscles counted one by one. Daily newspapers continued to headline the whole affair as the great "Monopoly Investigation" but Senator O'Mahoney made every effort to have the performance accepted as what he really hoped it would be: the soul-searching seance of the Century, without a major operation at the end.

"Monopoly" was the sure-fire political expletive which "Tommy-the-Cork" Corcoran put upon the loud tongues of Janizaries Bob Jackson and Harold Ickes when he pushed them out to make speeches just a year ago, in defense of the Administration after the arrival of Depression II. The word was misleading. What the Janizaries were really talking about was "oligo-poly"--selling by a few--based on statistical studies of busy-brained Economist Leon Henderson, who predicted the crash of October 1937 the spring before. He contended then that greedy Business, by raising prices too soon and too fast, would deflate the recovery boomlet of 1936-37. If the executive wing of TNEC has a preconceived case to prove and to act upon with legislation many months hence, this is it: that large concentrations of corporate wealth and productive capacity have, in various industries, anti-social powers which must be curbed by the Federal power. But after Mr. Henderson and the Janizariat and the President started out to prove that case, in stepped Senator O'Mahoney. He it was who, by nimble action on the President's message, preserved for Congress a half-interest in the investigation, and became its chairman. And since he did that, the mood of Congress has become even less critical of Business. Last week's copious anesthetics, administered by Mr. Henderson and friends, were thus for the benefit of Congress as well as for Business and for the scholarly reputation of the misnamed Monopoly Investigation.

Arithmetic by the ton constituted the anesthetic "prologue" of the investigation. Dr. Isidor Lubin, the dark, bird-like Commissioner of Labor Statistics, presented a bale of charts to show the growth of U. S. population, industrial production (total and per capita), national income ($432 per capita in the U. S. for 1934-35), employment. Biggest headlines were accorded his estimate that between 1929 and now the country "lost 133 billion dollars of potential income," including 119 billions in workers' wages for 43 million man-years of work.

Next day Statistician Willard Thorp, loaned to the Department of Commerce by Dun & Bradstreet for the great occasion, staggered the Committee's imaginations with a recital of how few corporations control how much employment and production in how many great industries. Like a dutiful father teaching baby how to count its fingers & toes, he ticked them off:

Industry No. of Co.'s Pet. of Control Year Automobile 3 86 1937 Bread & Baking 3 20 1934 Can 3 90 * Cement 5 40 1931 Cigarets 3 80 1934 Coal 4 10 1935 Copper 4 78 1935 Corn binders 4 100 1936 Corn planters 6 91 1936 Flour 3 21 1934-35 Plate glass 2 95 1935 Lead 4 60 1935 Steel 3 60/- 1935 Whiskey 4 58 1937-38 Zinc 4 43 1935

"Corporations with less than $50,000 total assets accounted for over half the number of all corporations, but only 1.4% of total assets," explained Mr. Thorp.

"At the other end of the scale, corporations with over $50,000,000, accounting for only .2% of the number, controlled over half of total assets for all corporations." And 6% of all corporations owned 86% of all assets. And so on and so on.

Third on the program was the smart, husky, popular encyclopedia who calls himself "the best damned no-trump player in the United States," Economist Leon Henderson, who used to work for the Russell Sage Foundation until he was taken to Washington for NRA, after the death of which he buzzed around aimlessly until the Janizariat learned his worth and put him in as TNEC's executive secretary. Through his swift and durable head must pass all the data presented to the Committee, timed and spaced for maximum clarity and effect. He summed up for his economist colleagues, raising Mr. Lubin's estimate of national income "lost" in Depression to 293 billions, reminding everyone that while 10,569,000 U. S. workers were jobless last October, about 6,800,000 of them would have been jobless even if the industrial system had been functioning at its 1929 rate. This was due to the steady growth of the U. S. labor force, which he figured currently at 40,000 per month. "We are at a strategic point in our economy," he said. "If we go on as we are, we are in for stagnation and decline. One of the interesting observations of recent years is the inability of the system to maintain itself at any level it has attained. We do not stop. We either go forward or back." He was for going forward, and gave as "the overall question" of the investigation: "Why have we not had full employment and full utilization of our magnificent resources?"

Messrs. Lubin, Thorp & Henderson were unanimous that the Investigation must find a way to increase the earning-consuming quotient of the nation's low-pay masses if the U. S. machine's performance is to be made magnificent.

Phenomena. "Dull but important" is Senator O'Mahoney's apologetic phrase for the Investigation. He hoped to make witnesses, however big of wig, feel (though subpoenaed) like voluntary bugs on a slide instead of the quarry in a witch-hunt. His program first called up big bugs from the motors and glass industries--Edsel Ford, William Knudsen, George A. Ball, William Levis--to be examined scientifically with special reference to their patent and sales practices as typical U. S. industrial phenomena.

Witness Edsel Ford, introduced as a representative of the motors "triopoly," said he believed that "patents should be worked" (not shelved to prevent their making present devices and models obsolete, as is charged against members of most "opolies").

Committeeman Thurman Arnold (Department of Justice): "You're also encouraging competition in that way?"

Mr. Ford: "I believe so."

Arnold: "I take it you don't desire exclusive control?"

Ford: "We have no such desire."

The witness said his company would license its patents to "anyone who wants to use them." Not since 1909 had it brought a patent infringement suit. ^

* No year given.

/- Production capacity.

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