Washington

on the World Today

WHEN former French Premier Paul Reynaud was in Washington this summer, he had a conversation with President Johnson, which naturally turned to the subject of Charles de Gaulle. “The trouble with that fellow is that he wants to bean me,” Johnson said of the French President. “But every time he throws a curve ball, I just step out of the box.” After the meeting, Reynaud, who knows English well, had to have the story explained to him. “Bean” and “box” were outside his vocabulary.

The story distressed a number of high State Department officials, who think that the act of stepping out of the box does not constitute a satisfactory European policy. Ever since Johnson entered the White House, he has been eager to patch up the quarrel with De Gaulle. He has stepped out of the box almost every time De Gaulle has thrown a ball, except when the latter called for a return to the nineteenth-century gold standard. That, the President quickly realized, would mean deflation and depression, and he replied vigorously. Yet his chief supposition has been that if he did not quarrel with De Gaulle, there would he no quarrel. That position has proved false.

Now the President has authorized a group of senior State Department officials, headed by Undersecretary George Ball and the able new Assistant Secretary of State for European Affairs, John M. I,eddy, to undertake a thorough review of our policies toward Europe. The study is overdue. While the President has been absorbed with domestic problems and with Asia and Latin America, our most important allies have been largely neglected.

A major and valid European criticism is that the President has acted quickly and even rashly in Asia, Africa, and Latin America without an understanding of Europe’s involvement. When Europeans complain about American unilateral action, it is because they sense more quickly than the President that their interests are intimately involved. A European policy cannot be viewed in isolation from events elsewhere in the world. The deterioration in Russian-American relations, for example, that has resulted from the war in Vietnam vitally affects the security as well as the economic and political interests of every Western European country.

Events won’t wait

In December, President de Gaulle is almost certain to be re-elected to a new seven-year term. We must take him at his word when he threatens to disrupt NATO, to reach a new understanding with Moscow, and to undermine the movement toward European political union. On these matters, the Johnson Administration must have its objectives clearly in mind, as well as the means it intends to use to reach them.

In recent months, the policy has been to muddle through, to try to outwait De Gaulle. But events will no longer wait, because De Gaulle is not idle. One need only read a book like the recent Is Paris Burning? to know the hatred and contempt that the French leader can summon up within himself for the United States, or for its policies of the last few decades as he interprets them. He has stated his objectives clearly enough for all to see. But while he is now the one powerful ruler in Europe, he is not invulnerable. Many Europeans, recognizing the political inability of Italy, Germany, or Britain to give decisive leadership at present, are begging for strong American leadership.

The objective is not a Europe without France. On the contrary, the objective is to build a united Europe with France as a key element. Many experts in Washington are convinced that this can be done and that France will not always oppose if the other countries show a clear purpose and a firm will. De Gaulle never liked the Common Market, and France’s boycott of its meetings created deep concern among Europeans. But it would be political suicide in France for him to wreck this creation of Europeans which he despises.

Europe can accomplish other objectives if it is not deflected by De Gaulle’s opposition, our experts think. They want the United States to establish its goals along the following lines, and to work unremittingly to achieve them: a stronger rather than a weaker NATO, with a full appreciation of Europe’s interests in Asia, Africa, and Latin America; more vigorous European political unity; success of the trade negotiations Tinder the Kennedy Round; closer cooperation within the Organization for Economic Cooperation and Development (OECD) in support of aid programs for the underdeveloped countries; a sensible and modern international monetary reform; and a new agreement on nuclear sharing.

The President’s appointment of John Lcddy has heartened officials here and in Europe who believe that if Washington only knows where it wants to go in its European policy it can succeed with the enthusiastic support of its friends in Europe. Leddy is a rlearminded economist with long experience in the State Department and in Europe. For two years he was Assistant Secretary of the Treasury for International Adairs. Most recently, he was the American representative in Paris on the OECD, where he gained valuable knowledge of all the European countries and their relationships with the underdeveloped world. Mis task now is to bring together the threads of an affirmative policy that will strengthen and carry forward the concept of the Atlantic community.

Company mergers and the antitrust laws

In the justice Department as well as in Congress there is much debate on how to bring the antitrust laws up to date and how to apply them equitably and effectively. The most difficult problem in this field is to determine the facts regarding economic concentration. No thorough study has been made since the Temporary National Economic Committee completed its work twenty-three years ago. Now Senator Philip A. Hart of Michigan, chairman of the Senate Antitrust and Monopoly Subcommittee, is engaged in a study that will last for many months.

Recently the newspapers reported that the Storer Broadcasting Company, which operates a group of radio and television stations, had obtained an option to purchase the controlling interest in Northeast Airlines and that the R. J. Reynolds Tobacco Company was proceeding with plans to merge with Pcnick & Ford, Limited, one of the country’s largest producers of cornstarch and caneand maple-sugar products. The Storer move into the airline business is what the economists call a “conglomerate” acquisition, or trust.

The Reynolds purchase is similar but not identical. There is debate over whether it is a “conglomerate” acquisition or a “vertical” one. The latter would be subject to the antitrust laws; the former would not be. The Justice Department, arguing that it is vertical, tried but failed to obtain an injunction to prevent the purchase. It has announced that it will pursue its lawsuit against the acquisition on the grounds that it would give Reynolds unfair advantage over small producers of cornstarch, a principal ingredient in paper-packaging products, of which Reynolds is a major consumer.

Textron’s empire

The antitrust laws forbid certain types of vertical integration — in which one steel company buys another, for example. But according to the courts, the laws arc silent or at least unclear on the subject of conglomerate trusts, which since the end of World War II have mushroomed. A pioneer in the field is Textron, Incorporated, which began as a textile manufacturer. Now its most important line is helicopters. It also produces chicken feed, chain saws, outboard motors, optical machinery, men’s dress shoes, electric golf carts, fiber-glass boats, aircraft parts, watch bracelets, and other products.

Textron has 27 separate divisions and 113 separate plants. It may be a leader in the field of acquisitions, but it is not alone. The Columbia Broadcasting System has purchased a ball club; Minnesota Mining and Manufacturing Company is manufacturing movie cameras, electronic equipment. chemicals, and plastics. Hundreds of other companies also are “diversifying.”

The antitrust laws were written more than a half century ago to break up the trusts and to prevent one manufacturer from dominating a particular field of production and thus dictating prices. The laws say nothing about the company that wants to manufacture both helicopters and watch bracelets as long as the company docs not attempt to corner the market in either field. But Congress is concerned. It wonders whether a manufacturer of tires, radios, cameras, shoes, and toothpaste might unduly influence the price of shoes by taking a loss in that field in order to squeeze out competitors. To find the answer to some of the questions, the Senate Antitrust and Monopoly Subcommittee began its marathon inquiry.

“We are not against size per se,” Senator Hart explains. “We are trying to understand the economic consequences of the conglomerate structures, which are increasing all the time.” He also is concerned over the effect of new procedures in agriculture. Small farmers complain to him that when a big chain store raises its own chickens, produces the feed for them, manufactures the fertilizer to grow the feed, and conducts its own processing plants, the small farmer is entirely at the mercy of the chain.

Witnesses have told Hart’s committee that since 1947 the 100 largest manufacturing corporations increased their share of total assets of all manufacturing firms from 39.3 to 48.1 percent. During the same time, their share of net capital assets rose from 45.8 to 56.9 percent.

New trustbuster

In April, President Johnson named a new assistant attorney general in charge of the Justice Department’s antitrust division. He is Professor Donald F. Turner of Harvard University. He succeeds William H. Orrick, Jr., who had the reputation in the business community of being a crusading antitruster. When Turner was nominated, Attorney General Nicholas deB. Katzenbach, who had not always supported Orrick, found it necessary to announce that the new antitrust chief would be neither tougher nor tamer than his predecessor. But Katzenbach said that policy will be made clearer, obviously a desirable aim.

Turner is not so much concerned by some aspects of the monopoly problem as Senator Hart is. In a recent Harvard Lau Review article, Turner wrote that while the concentration of assets in the largest business firms “has risen somewhat over the past several decades,” there is “little or no indication that any relative decline in the opportunities for small business has occurred.” Their number has risen “steadily and substantially over the years.” he said,

As for the conglomerate mergers, he said it is wise to “proceed with caution” against them. A broad attack on this kind of business acquisition would force the courts into “an unprecedented reliance on judgments of an essentially political nature,” he wrote.

Turner’s writings show that he favors a tough policy where large companies acquire “unreasonable market power” or where a small group of large companies exercise excessive power. He wrote some years ago that he would break up such groupings into nine or more moderately large companies. Does this mean that he will attempt to proceed against the automobile companies? It is doubtful that he will be allowed to do so by the consensus Democrat in the White House.

Revising the copyright law

Congress has been examining for two years measures designed to revise the copyright law, and it is far from a decision. A bill before the House Judiciary Committee would give much greater protection than at present to authors and composers. Under present law, a copyright lasts for twenty-eight years with the right to renewal for another twenty-eight years. Any unexpired term goes into the owner’s estate. Under the new bill the term of the copyright is the life of the author plus fifty years. Principal objection to the measure conics from educators, who fear that they would not be able, as they arc now, to reproduce charts or pages from a book for use in classrooms without paying royalties.

Another bill, now before the House Ways and Means Committee, would remove present tariffs against educational, scientific, and cultural materials produced in other countries, thus permitting a larger import of such materials. English-language books by foreign authors published overseas bear a 3.5 percent tariff when brought into this country. Books in English by American authors published overseas are taxed 7 percent, to protect the American printing industry.

A third issue at stake in the copyright debate concerns what would happen if Russia should sign the Universal Copyright Convention, which American authors and publishers have long urged Soviet authorities to do. American authors and publishers would benefit from the signing because their works could no longer be pirated in the Soviet Union. But if Russia signed the convention, Soviet authorities would be able to censor or prevent the foreign publication of books and articles published in the Soviet Union.

Mood of the Capital

It would be an exaggeration to say that the Democrats are shedding tears over the dilemma of the divided Republican Party. But there is a strong feeling in Washington that LBJ outfoxes the GOP at almost every turn. What is more, Republicans are spending as much time fighting one another as they are opposing Democrats.

The spectacle of Ray Bliss attacking Barry Gold water, of Senator Dirksen and Representative Ford berating Democrats who criticize the President’s foreign policy, of Representative John Lindsay avoiding the Republican label as he seeks the Republican nomination as mayor of New York leaves the Democrats beaming with happiness.

Lindsay could wipe away a part of that Democratic smile if he were to win or come close to winning, for be is the only promising new figure in a party desperately in need of red blood. He is young, attractive, articulate, a relative nonpartisan in the eyes of liberal Democrats, and charmed, some believe, with some of the aura of political luck that surrounded John F. Kennedy. For the more partisan Republicans, though, the question is whether John Lindsay is enough of a Republican to be a strong warrior against LBJ’s consensus politics.