As part of my J. D. Ross research, I’ve been reading FDR’s May 26, 1940, fireside chat titled “On National Defense.” After making a pitch for beefing up the military in response to what was happening in Europe, he said this:
” But there is an added technique for weakening a nation at its very roots, for disrupting the entire pattern of life of a people. And it is important that we understand it.
“The method is simple. It is, first, discord, a dissemination of discord. A group –not too large — a group that may be sectional or racial or political — is encouraged to exploit its prejudices through false slogans and emotional appeals. The aim of those who deliberately egg on these groups is to create confusion of counsel, public indecision, political paralysis and eventually, a state of panic.”
The result, he said, is that people “can lose confidence in each other, and therefore lose confidence in the efficacy of their own united action. Faith and courage can yield to doubt and fear. The unity of the state can be so sapped that its strength is destroyed.”
These are important words to remember, especially as we prepare to go to the polls for an important midterm election.
The research I’ve been doing for my next book–a biography of early 20th-century public power advocate J. D. Ross–has made me keenly interested in United States policies toward monopolies and trusts. One little-known fact I’ve come across is that monopolistic practices by private power companies in the 1920s played a significant role in causing the Great Depression.
Although US anti-monopoly law goes back as far as the 1890 Sherman Anti-Trust Act, a key provision of which “makes illegal all attempts to monopolize any part of trade or commerce in the United States,” corporate tendencies toward industry consolidation and control have only rarely been curbed or even slowed.
As a result, most areas of the US economy are dominated today by corporate entities, against whom small business owners have difficulty competing. While it has always been rare for one company to have a true monopoly (as ALCOA did in the aluminum industry before WWII), it is increasingly common for a handful of corporations to hold near-total dominance in various areas.
~ ~ ~ ~ ~
To learn more about monopolies and anti-monopoly efforts today, I recently attended a forum put on by the Institute for Local Self-Reliance (ILSR), an anti-monopoly group whose tagline is “Building local power to fight corporate control.”
The forum–cosponsored by another anti-monopoly group, the Open Markets Institute–took place at Open Book in Minneapolis on September 22, a day I just happened to be passing through the area. The first speaker was US Federal Trade Commissioner Alvaro Bedoya, who was appointed by President Joe Biden and sworn into his position on May 22 of this year.
In Bedoya’s speech, which you can read in its entirety here, he discussed a disturbing narrowing of the definition of “monopoly” over the past 40 years, as US administrations and Supreme Court rulings have focused increasingly on issues of “efficiency” rather than “fairness.”
According to this definition, as long as big businesses create “efficiencies” in the market, including keeping consumer prices generally low, it doesn’t matter if their practices are inherently “fair” or not to smaller competitors or even consumers.
Yet, as Bedoya pointed out, fairness has been part of anti-monopoly legislation since the beginning, while the word “efficiency” doesn’t appear in any anti-monopoly or anti-trust laws.
The result of this narrowing of definition has been a subsequent narrowing of ownership and opportunity, which, as we saw with the meatpacking troubles during the early months of Covid, can lead to drastic and unnecessary problems.
“Picture a set of 39 companies,” Bedoya said to illustrate what’s happening. “Some pharmacies, some PBMs [pharmacy benefit managers], some insurers. Twenty years ago, these were all separate. Today, those 39 companies have merged into just three vertically integrated entities. And so today, when most people fill a prescription, just one of three entities mediates what medicine they get, what they pay for it, and how they will get it – and that corporate entity makes money by making sure that prescription is filled by its own pharmacy.”
Bedoya spent a sizable portion of his speech on the ant-monopoly requirements laid out in 1936’s Robinson-Patman Act, which I encourage you to read about here. The R-P Act is almost entirely focused on preventing predatory pricing agreements that leave smaller competitors at a disadvantage. In other words, its focus is fairness. Yet it has been almost universally ignored in recent years by administrations and the courts.
~ ~ ~ ~ ~
Two panel discussions followed Bedoya’s remarks. The first panel featured R. F. Buche, an independent grocery store owner in S. Dakota whose stores are exclusively on Native American reservations. Buche’s frustration with the more-favorable deals offered by large consumer-product corporations to places like Walmart and Dollar General was palpable. (One statistic he cited was that 65% of US grocery sales today come from five companies.)
Another participant on the same panel was independent bookstore owner Angela Schwesnedl, who said that there is only one wholesaler left through which she can buy new books. As a result of the consolidation in her industry, she said, independent bookstores like hers account now for only 4% of the book market.
Stu Lourey of the Minnesota Farmers Union, who was on the second panel, told the audience that a mere four plants control 85% of the meatpacking market. And Minnesota farmer Hannah Bernhardt talked about being forced to travel a ridiculous number of miles just to have her livestock butchered.
This is only a taste of of the many disturbing statistics, trends and practices presented at the forum, mostly by common people struggling to stay afloat as farmers, grocers, and small business owners.
I’ll be writing more about monopolies and trusts in future posts. Meanwhile, I encourage you to learn more about them yourself, starting with these links:
When James Delmage Ross died suddenly on March 14, 1939, President Franklin Roosevelt mourned his passing by telling the country it had lost “one of the greatest Americans of our generation,” a man whose “successful career and especially his long service in behalf of the public interest are worthy of study by every American boy.”
Yet “J. D.,” as he was called by everyone who knew him—from the president to senators to children in his neighborhood—is virtually unknown today. Even in Seattle, where he was once the city’s most powerful—and popular—figure, those who recognize his name know it only because a dam and lake on the Upper Skagit River were dedicated to him.
In the Depression years, however, as the nation suffered the aftermath of predatory practices by private companies, Ross became known across the land as a tireless advocate for publicly-owned electrical power. FDR held him in such high regard, he chose him to sit on the Securities and Exchange Commission, to keep tabs on the country’s private power companies, and then to serve as the first superintendent of the Bonneville Power Administration, one of the most important strategic positions in the years leading up to World War II.
By then, Ross had built Seattle City Light into one of the world’s model municipally-owned power systems and championed changes to both the production and distribution of electricity that reduced power rates to a fraction of what they had once been. He had also toured the country for years, making the case for public control over the nation’s electrical grid.
If the country had listened to him—or he had lived longer—there’s no doubt our power system would be in much better shape than it is today and people everywhere would understand FDR’s words of praise.
A self-taught electrical engineer who rose from humble beginnings to become the ideal civil servant and a close friend of the 20th century’s most powerful president, Ross is the kind of figure whose story—and example—we need today. Which is why I’m pleased to announce that I’m writing the first biography to ever be written of him.
My work on Ross is being supported, in part, by the Oregon Historical Society’s 2022 Donald J. Sterling Senior Research Award in Pacific Northwest History. In the weeks ahead, I’ll be posting more about my finds in the months of research I’ve already done, as well as updates as the research and writing continue.
If you follow me on Instagram or Facebook or check this site in the coming days, you’ll see images from Ross’s hometown of Chatham, Ontario, once known as the Black Mecca because it served as a terminus for the Underground Railroad. His journey from Chatham to Seattle began in 1897 when he walked—walked!—from Edmonton, Alberta, to the Klondike gold fields after a doctor told him his lungs were failing and he needed more exercise.