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Soon after war began, Arnold began to look into patents as a trade-restraining device. Last December he brought suit against Corning Glass Works, Hartford Empire Co. (whose tight hold on glassmaking machinery was publicized by TNEC) and most of the glass industry, will try the case next month. In March he jumped Masonite Corp. (which is fighting) and Bausch & Lomb (which paid a $40,000 fine) for contracts he did not like. Next came the spectacle industry and Johns-Manville. Meanwhile France fell.
So far from being interested in spectacles and rock wool, the country (and its newspapers) became interested in nothing but defense. Arnold and his men therefore took stock of themselves. Overnight their patent quest, without changing its quarry, gave it a new name: Bottlenecks.
As a publicity device, the Bottlenecks investigation got off to a bad start. Talking carelessly to reporters, Arnold produced huge headlines, vague stories about defense-hindering control of U. S. patent users by the German firm of Krupp. He had designs on a number of industries in which foreign patent tie-ups were said to be restricting U. S. production, among them magnesium, whose chief producer, Dow Chemical Co., has built an independent U. S. magnesium industry (using sea water as ore) from its own smart research. Arnold also got off a phrase about "economic fifth columnists" which he later tried to define, finally retracted. The vagueness of his charges, coupled with the fact that no indictments were announced, got him a bad press. The Wall Street Journal editorialized about "Folklore of Magnesium." But last week Arnold's Grand Jury, hard at work since mid-July, began churning out "bottleneck" indictments—four in four days.
>-Wellington Sears Co., three other makers or distributors of airplane fabrics (for wings, fuselages, ailerons, etc.) and their officers were indicted for hiking and maintaining identical prices.
>Five small companies and their officers were indicted for conspiring to control the supply of bentonite, a clay used in making molds for casting engine blocks, other foundry products.
>Corning Glass and General Electric were indicted for conspiring to monopolize the manufacture of glass bulbs, by paying royalties to a Dutch firm to keep the Dutch bulbs out of the U. S. It was not a case to arouse much defense interest. Said G. E.'s young chairman Philip Reed: "If we have made any mistake we want to know about it."
>G. E. was also indicted (along with its subsidiary Carboloy Co.) for a 1928 patent deal with Krupp on tungsten car bide alloys. President L. Gerald Firth of Firth-Sterling Steel Co., one of Carboloy Co.'s three licensees, applauded.
Like G. E., like Pullman, Inc. (indicted in July), like Aluminum Co. (entering its third consecutive year in the courts), many of Arnold's corporate victims are vital cogs in defense. Arnold himself confesses that an anti-trust indictment, even if successfully defended, is itself a punishment, "a financial hazard which should not carelessly be imposed on business." It is also demoralizing to the executives indicted and takes their valuable time. Hence, with the Defense Commission seeking all the businessmen's cooperation they can get, the heat is on Arnold to go slow.