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The Aluminum Trust Prospers

Uncle Sam Plays Santa Claus to Add to Mellon’s Millions —

(July 1941)

From The Militant, Vol. V No. 29, 19 July 1941, p. 5.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

On June 9th, when Roosevelt sent the Army to break the North American aviation strike which had been on but a few days, there was elsewhere, unknown to the public, a far longer and more important cessation of work. Since early in May, work on the giant Boeing bombers had been halted and was not likely to be resumed until some time in July.

Why didn’t Roosevelt send the troops to get work started on the Boeing bombers?

Because he couldn’t blame that on strikers. Boeing was shut down because of lack of aluminum. On May 24 the New York Herald Tribune reported in an obscure item that work on Boeing bombers had “ceased entirely early this month and will not be resumed until some time in July.” Nor is Boeing the only plant affected. It is now officially admitted that potential production of military aircraft will in all probability be curtailed by some 25 per cent for lack of aluminum.

That loss is equivalent to a three-month continuous strike shutting down the entire aircraft industry. If such a strike took place, the Army would be shooting down the strikers. But neither the Army nor any other agency of government is doing anything to the Mellon family’s Aluminum Corporation of America, the monopoly which deliberately engineered this aluminum shortage.

This shortage is not a result of miscalculation. On the contrary, it is a deliberately contrived shortage, as the following account will demonstrate.

OPM Connived at Concealing Shortage

For a year and a half the OPM and other government agencies issued misleading reports assuring the country that there were ample production facilities for aluminum. These reports were based solely on the estimates supplied to the government by the Aluminum Corporation of America – ALCOA.

That this was a conscious deception, carried out in the interest of ALCOA, has been established by the facts uncovered by the Truman Senate Investigating Committee, which issued its report on June 26.

“It is reasonable to conclude,” charged the Truman report, “that ALCOA had convinced OPM of the adequacy of the supply in order to avoid the possibility that anyone else would go into a field which they had for so many years successfully monopolized.”

ALCOA, as the committee discloses, was producing only 327,000,000 pounds of aluminum in 1939, the total national supply By next year it will be unable to produce more than 730,000,000 pounds. Yet the total civilian and war needs for this vital metal in 1942 are fixed by the committee at not less than 2,100,000,000 pounds, – 1,600,000,000 for military purposes alone.

When the Reynolds Metal company sought government aid in 1940 to enter into aluminum production. Stettinius, acting for the OPM, cold-shouldered the proposition, stating that the production facilities were already adequate. Reynolds went instead to the RFC, and finally secured a loan with which it is building a plant in the Tennessee Valley which will be able to produce 120,000,000 pounds by next year. Thus, the total production of aluminum by 1942 will be not more than 850,000,000 pounds as compared to a need for 2,100,000,000 pounds.

The OPM ignored offers of other companies, including that of a Swiss company which proposed to build a plant here entirely at its own expense.

ALCOA Reaps the Fruit Gained by Its Lies

Why did ALCOA lie about its producing capacity? What was behind this fraud, the Truman report makes clear:

“They (the company) may have reasoned that in its desperation the Government would do almost anything to increase the supply and that ALCOA would be favorably treated by the Government in order to insure an adequate supply for defense purposes.”

That’s just what is happening. Instead of being punished for its lies, ALCOA has the government doing “almost anything” for ALCOA.

The main item in the cost of production of aluminum is electric power. Power production, says the Truman report, represents “the greatest dollar investment in the facilities for the production of aluminum.”

But for decades ALCOA has been battling with the Federal Power Commission, refusing to build power plants under the government regulations, which set certain limitations on profits chargeable to power plants. For example, in 1937 ALCOA abandoned plans to build a power plant in North Carolina, for reasons which the Federal Power Commission termed the company’s “complete unwillingness, to accept the provisions of federal law.” Likewise, despite an announcement by the OPM in October 1940 that ALCOA had agreed to build a power project at Fontana on the Little Tennessee River as its “contribution to national defense,” no actual steps to build it have occurred.

And why should ALCOA spend its own money to build power plants? When it can get the government to build them with its own money and “sell” the power to the company at the cheapest possible rates? When it can get the government to arrange for tens of millions of people to curtail their use of electric power for the benefit of ALCOA?

Southerners are being told to do without, lights, air-conditioning, electric fans. Movie houses are being run on short schedules and night ball-games are being cancelled. Atlanta turned out its brightest street lights, required merchants to shut off their electric signs, etc.

OPM chiefs William S. Knudsen, and Sidney Hillman, in a “message to the people of the South” on July 1 called on them to “make every possible effort to save electric current in their area so that it could be devoted to the production of aluminum so vitally needed for airplanes.”

ALCOA’s plan to get the people to foot the bill for its major production cost, power, is thus bearing fruit!

Government Will Build for Alcoa’s Benefit

Although the desperate aluminum situation could not be concealed after February, the OPM did not in any way propose to intrude on the ALCOA monopoly. Instead of preparing to erect goverment plants to meet the needs of “national defense,” the OPM simply instituted priorities, that is, it arbitrarily diverted aluminum supplies from civilian consumption goods to military needs, thus immediately raising the prices on aluminum products and throwing thousands of workers in the consumers goods industries out of work. Even so, aluminum production was still short by some 600,000,000 pounds of military needs alone.

Than began a heightened campaign to get scrap aluminum from civilians. Housewives were, to sacrifice their pots and pans, etc. The impression was falsely given that this would help to meet the need. Yet all that OPM experts expect to get by this means is 15 million pounds of aluminum – 2½ per cent of the shortage!

Now the government has announced plans to build eight new aluminum plants, with a total capacity of 600,000,000 pounds. When these plants are completed, they will bring the supply of aluminum, including imports, from ALCOA’S Canadian subsidiary, just about up to military needs, with none to spare for civilian goods.

But these plants will not be ready for a year and more; and when they are completed, the government announces, they will be operated by the Reynolds Metal Company, Bohn Aluminum and – ALCOA. ALCOA is to get the lion’s share!

As for power, TWA is now building four new dams, with a capacity of 300,000 kilowatts a year, and $40,000,000 was appropriated last week for the construction of four more TVA dams and additional turbines and transmission facilities. These additional facilities will just about meet the needs of ALCOA, which is the largest industrial consumer of TVA power.

The government is thus planning to provide just enough additional power to give ALCOA the cheapest possible production costs, but not enough to infringe on the private power companies or to prevent the restriction of electricity in the homes.

Meanwhile, the Department of Justice monopoly suit against the Aluminum Company of America, which was instituted last February, has been pigeon-holed, like the similar suit in 1937.

The aluminum situation gives immediate and decisive point to the demand of the Socialist Workers Party:

Expropriate the war industries and operate them under workers control!

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Last updated: 27 May 2016