Who Fumbled Aluminum

If the U.S. by terrific effort attains an aluminum ingot capacity of 600,000 tons (up 420,000 tons from 1940) by next year, and cuts off all aluminum for civil and indirect military uses, it may have barely enough for direct military needs. Such was the consensus of testimony last week before Senator Harry Truman's committee investigating the state of U.S. defense. But what really interested the committee was why the Army, Navy, defense production agencies and the aluminum industry itself all failed to recognize that fact last fall.

One of the prize witnesses was Richard S. Reynolds, whose Reynolds Metals Co. has long been a customer and is now becoming a competitor of Aluminum Co. of America. Said he: "In the late spring of 1940, when Germany invaded the Low Countries, I became very much concerned . . . convinced in my mind that this would be a light metal war. . . . [I called on] Mr. Arthur V. Davis, chairman of the board of the Aluminum Co. of America . . . and ex plained that I felt that Germany, her allies and conquered territories . . . could produce three times the aluminum that his company was producing in America, and I stated that I thought he should inform our Government of the true situation and not permit us to be caught in the same position as France. I urged him to ask for Government funds sufficient to enable his company to produce 1,000,000,000 lb. of aluminum. . . . Mr. Davis expressed himself that he felt I was unnecessarily alarmed, and that he could not make this recommendation, stating that in his opinion there was ample aluminum and that there would be no shortage."

Witness Reynolds told how he got RFC to make his company a loan to build two new plants (now nearly completed) which will have a capacity of 60,000 tons of primary aluminum per year and give Alcoa its first substantial competition. He also told how he arranged to buy Government power from TVA in Alabama and Bonneville Dam on the Pacific Coast (as Alcoa has now done). Alabama's Senator Lister Hill then asked: ". . . Did you get any cooperation from the Defense Commission?"

Mr. Reynolds: "Well, I don't think this is the time and place to bring that up. I am sure that they were sincere in their opinion that there was ample aluminum. . . . They are thoroughly aroused at the moment."

Senator Hill: "They certainly weren't aroused at the time you went there and talked to them [last fall]. . . ."

Mr. Reynolds: "No, they really objected, because they said it wouldn't be needed. . . ."

Alcoa's Davis and OPM's Edward Stettinius, on whose judgment this testimony reflected, did not testify last week. Other testimony: > A young OPM economist, Grenville R. Holden, testified that although he had no special knowledge of aluminum production, he passed on aluminum matters. He had a distinct preference for Alcoa, had a hard time explaining why an offer by Detroit's Bohn Aluminum and Brass Corp. to build new capacity was rejected. > Said the chief Alcoa witness, senior Vice President G. R. Gibbons: "No corporation in the U.S. has . . . done more [than Alcoa] . . . in the way of stepping right up and doing what it could for the defense in expending its own money or someone else's money, and in doing what it could to increase the output. Our capital has practically been doubled in what we have in this business. We have gotten to the end of our rope; . . . we have spent $200,000,000 and our credit is still good; we hope we will be able to finance [further expansion]; we haven't financed it." > When Mr. Stettinius announced last November that there would be enough aluminum for civilian and military needs and some to spare, Alcoa was already delaying deliveries on some of its civilian orders. Mr. Gibbons said that the Stettinius office so far as he knew had not consulted Alcoa before issuing the statement, and that Alcoa did not feel called upon to correct the estimate. > Committee Counsel Hugh Fulton declared that Alcoa had "refused" to make the deliveries (particularly to Mr. Reynolds' company, which had previously processed Alcoa aluminum and was then looming as a competitor). Said Mr. Gibbons, denying the charges: "You use such hard words, Mr. Fulton, you make me flinch."

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