(2 of 4)
On futile anti-trust crusades "men like Senator Borah founded political careers." When Arnold confronted the Senate sub committee that was to approve his Department of Justice appointment, his chief questioner was Borah. Arnold said he believed in the anti-trust laws. Said Borah, closing The Folklore of Capitalism: "I've been sadly misled by your book." In office, Arnold continued to mislead.
Paunchy, sloppy, nervous and absentminded, he sits in an enormous office, his pince-nez suspended on a black ribbon, ashes all over his vest. Before he has finished his cigar, he starts sucking a cold pipe, then returns to the cigar. He speaks into an intercommunicator, gets no answer, shouts at it, then finds he forgot to turn it on. Chuckling and giggling, he delights in whimsies, fables and gags of the sort that baffle most businessmen, some of whom think he is insane.
Legal Blackmail. But as an enforcing agent the laughing professor is not funny at all. He launched and is prosecuting the most comprehensive anti-trust drive in U. S. history. A tiresome complainer about lack of funds, he has more than tripled his division's budget since 1938. Favorite Arnold statistic: in Roosevelt I's regime, the division had five lawyers, four stenographers. Arnold has 190 lawyers and wants 100 more. For wheedling money from Congress ($1,325,000 for 1941) he has a cogent argument: in the first six months of this year, his division secured judgments returning $2,421,000 in fines to the U. S. Treasury, expects to return some $4,000,000 more. As for consumers, Arnold estimates that his major prosecutions have saved them (in lower prices) some $270,000,000 so far.
Taking advantage of the Sherman Act's "vagueness" (favorite corporation lawyer's complaint), Arnold installed his own definition of trade restraints, his own prosecuting technique. Instead of busting merely big corporations, he went after all industrial situations where he smelt a fishy price. Usually he brings criminal rather than civil actions. If his victims reform their ways thoroughly enough, Arnold then sometimes signs with them a consent decree, nol-pros the criminal action. High-minded businessmen like General Motors' Alfred Sloan (who fought a criminal suit in court rather than sign away G. M.'s profitable sales-financing subsidiary) regard this technique as a form of legal blackmail. Arnold regards it as an efficient way to bring prices down.
First big objective in Arnold's drive was the building trades, which he attacked on all fronts at once: contractors, suppliers, union leaders. In Pittsburgh, after he got an indictment of twelve contractors and a trade association, the low bid on a municipal hospital dropped from $152,000 to $117,000. The investigation leading to the indictment cost $10,753, less than one-third the saving. In his Chicago milk case, involving dairies, the drivers' union and the Board of Health, Arnold figures prosecution cut Chicago milk prices by $10,000,000 a year. His next big target: food distribution, now under investigation. Such attacks, argues Arnold, by increasing U. S. consumer purchasing power, help solve the farm problem.