• GOVERNMENT

Antitrust vs. Expansion Abroad Both business and government agencies r a p an in­ternat iona l FTC —favor c lar i f icat ion of antitrust laws

Ο N E should not be punished here for doing abroad what one would be punished abroad for not doing," says Charles R. Carroll, National Foreign Trade Council. This sums up the opinion of many industries, including chemical companies, with overseas operations. Many of the industries live in the threat of having an antitrust suit slapped on them here because they have obeyed the letter of the law abroad.

Much of this punishment or threat of punishment stems from the highly confused interpretations of U. S. anti­trust laws in the light of foreign opera­tions. Nearly everyone who testified before Sen. Harley M. Kilgore (D.-W. Va.) , chairman of the Judiciary Sub­committee on Antitrust and Monopoly, agreed on this point.

As Carroll pointed out, many foreign nations subsidize and license exports and imports. In other cases, certain governments control production, prices, and distribution. A U. S. company, if it is to do business in such areas, must comply -with these regulations. The resulting situation, if judged wholly by U. S. antitrust concepts, would be considered unreasonable

restraints of trade and thus violation of the law, he says.

Opinion varied on what to do to clarify U. S. antitrust policy. Sen. Kilgore asked leading questions for any opinions about the proposed United Nations antitrust agency (C&EN, Sept. 12, page 3788) . The agency would be much like an inter­national Federal Trade Commission. Many disapproved of the agency as proposed. Chief objection is that the agency, although international, would be able to prosecute only American companies. This is because the agency would have power only against private industries and most foreign industries of any size are public or government-backed.

• A Green Light Agency. Some other industry spokesmen said they would like to see a U. S. agency to which an industry, contemplating foreign operations, could go to and get a clean bill of health for its proposal. After that, a company could go ahead with its plan knowing that it would not find itself suddenly faced with an antitrust suit. Proposed: a separate agency, a new division in either the

Uncovered at Hearings o n Antitrust Laws and Overseas Expansion

• Original idea of 'limited exemptions" to antitrust laws for overseas invest­ments is disclosed, not as "exemptions," but a need to define in what degree the laws apply to the operation of foreign subsidiaries that must comply with another country's law.

• Very few countries subscribe wholeheartedly to the concept of free enter­prise. Many Governments back their industries and, in effect, create cartels which U. S. industries must play ball with if they expect to do business.

• A number of U. S. companies investing or entering patent licensing agreements abroad are unable to participate in the U- S. guarantee program for foreign investments. Foreign nations impose restrictive business prac­tices frowned on by Justice and thus contracts are unacceptable to the guarantee program.

• The Webb-Pomerene Act is only mildly effective in helping U. S. firms compete against foreign cartels.

• Per Presidential request to the Si..·:- T^^artment, diplomatic efforts are under way t o enlist the cooperation of f orei^*. -entries in eliminating their restrictive business practices and adopting a truer fA ?e enterprise system.

Crippled by antitrust laws?

Justice or State Department, or in the FTC.

The company, nevertheless, would not be handed a carte Manche to do anything and everything it wanted to do after that point. If it stepped over the line, the agency which gave ap­proval could review the operation. The company would then either have to toe the mark or show its opera­tion is in fine with the original pro­posal. If not, the agency could revoke approval and the company would be wide open for Justice Department action, including probable criminal suits.

Before such an agency could be established, however, certain steps must be taken either by Congress or the Administration. For instance, Robert F. Loree, NFTC chairman, made three such proposals. First, says Loree, an effort must be made to clarify what activities outside of the U. S. are within the statutory intent of the anti­trust laws and what are not. Secondly, an effort should be made to stabilize the law and rules of conduct, so that "what is done or planned today in perfectly good faith and with the most competent legal advice obtainable, "will not tomorrow be attacked as illegal or publicized as criminal." Lastly, the law should give clear recognition to the fact that businesses established abroad or carried on in foreign coun­tries are amenable to the standard of conduct of the host country and should not be attacked unless their acts have a very adverse effect on the commerce of the U. S.

One precautionary note injected into the hearings came from Blackwell Smith, member of the recently dis­banded Attorney General's committee

4 0 6 6 C&EN SEPT. 2 6. 1955

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to study antitrust laws. Smith gen­erally favors revamping of the 60-year old antitrust laws in the light of foreign operations. But great care must be exercised, he warns, from accepting any proposals that give a monopoly an additional power tool to be used against U. S. citizens. It is the indirect means, not always apparent, that he cautions against—especially those delaying tactics that can tie up litigation for years.

Sen. Kilgore is now off for a Con­gressional tour of Europe. He will discuss many of the questions raised at this hearing with government officials in London, Paris, and Rome.

Titanium Bottlenecks Surplus of titanium sponge foreseen as melting and f a b ­ricating problems de lay end-use of the metal

Slowdown in the mining, produc­tion, and use of titanium metal can be expected to continue until melting and fabricating bottlenecks are eradi­cated. Expansion of U. S. sponge capacity already has been curtailed by Defense Mobilization's Arthur S. Flemming (C&EN, Sept. 19, page 3887). He took this action on the recommendation of Studebaker-Pack-ard's Harold S. Vance, special con­sultant appointed to study the titanium problem.

In addition, Flemming instructed the General Services Administration to keep purchases of sponge at a level consistent with the current use of the metal. He makes provision for in­creased buying if fabrication and melt­ing techniques are improved to give a better product. He also provides for buying just enough sponge to keep present operations going. From one point of view, this could be an indirect incentive to the big five sponge producers.

The big five—Du Pont, Titanium Metals, Cramet, Union Carbide and Carbon, and Dow—having licked the sponge problem, may yet have to turn to research in melting and fabricating to keep their investments from becom­ing white elephants. At the same time, Flemming has authorized contin­ued rapid tax write-offs for new melt­ing and processing faculties, including research and development. According to Vance's report, the major technical problems are in the field of fabrication and can be solved soon. With this

problem licked, there can be substan­tial reductions in cost and, of course, speed-up in production.

Texas City Settlements Eight years after the disaster at

Texas City, Tex., when the French freighter Grandcamp exploded wliile loading ammonium nitrate, the Govern­ment is assuming "compassionate re­sponsibility" for many of the losses. Previously, long years of litigation ended finally in the Supreme Court which absolved the Government of any legal liability. Congress, nevertheless, on Aug. 12, 1955, passed a law allow­ing for settlement of the claims result­ing from death, personal injuries, and certain property losses.

Investigation and settlement of claims will be the job of the Army's Judge Advocate General's office. That office expects to publish rules of pro­cedure in making claims about Oct. 11. The law requires all claims to be submitted in writing before Feb. 9, 1956, to the Chief, Claims Division, Office of the Judge Advocate General, Fort Holabird, Baltimore 19, Md.

Potomac Postscripts • Little primary aluminum will be delivered to the national stockpile this quarter in an effort to alleviate the shortage in industry. About 25,000 tons will be delivered and 75,000 tons deferred to industry.

• Food and drug laws are being consolidated and revised with re­spect to new-drug regulations. Major changes set forth hearing procedures before a new drug can be refused or suspended. Rewritten new-drug application is included. Written comments on the revision must be made by Oct. 8.

ί Copper squeeze is no better. ODM continues to defer the metal. Latest order defers about 11,000 tons to industry. Little, if any, copper is believed to be going into stockpile or defense production in­ventory during recent months.

ί Business executives and top De­fense Department military planners will be meeting around the country to jointly infuse more production know-how into industrial mobiliza­tion planning. First meetings will be held at San Francisco on Oct. 5 and 6.

4 0 6 8 C & E N SEPT. 2 6, 1955