New Deal for Harvey

Leo M. Harvey is a Los Angeles aluminum fabricator who doesn't give up easily. He was all set to get a $46 million Government loan to make him the nation's fourth producer of aluminum (TIME, Oct. 1) when Interior Secretary Oscar Chapman blocked the loan. Chapman did not like some things he had heard about the Harvey company's work for the Navy during World War II. Bitter at the turndown, Harvey grudgingly went to the giant Anaconda Copper Mining Co. with a proposal. He knew that Anaconda was eager to find a steady source of aluminum for its fabricating subsidiaries. Would Anaconda like to buy control of the subsidiary Harvey had set up in Montana for his aluminum project? Anaconda would; it bought 95% of Harvey's subsidiary and got Harvey's contract for electric power from the new Hungry Horse Dam. Harvey, in turn, was assured of a good chunk of the new aluminum produced for his own fabricating plants.

New Objections. But the Government had new objections. Anaconda was already the biggest company in the copper industry, and Secretary Chapman did not think it should move into aluminum. Said he: "The proposed arrangement will not further [competition]." Attorney General Howard McGrath also objected on the same ground.

Last week DPA Boss Manly Fleischmann overruled them both. He told Chapman "to enter into a suitable long-term contract with the proposed new producer for power from the Hungry Horse project." Fleischmann said he approved the Anaconda-Harvey deal because the plan for an enlarged Air Force (143 wings) made the need for aluminum urgent, and the Anaconda plant should be producing at the rate of 72,000 tons a year by 1953, soon after the Hungry Horse Dam is fully completed. Feischmann could not see any threat of monopoly; the new plant, said he, would produce less than 4% of all U.S. aluminum, tend to increase competition, not reduce it.

New Supplies. The Interior Department acceded to Fleischmann's request, and power negotiations with Anaconda-Harvey were begun. There was one thing that Fleischmann did not mention in his letter, and reporters were quick to take him up on it. What about the wartime charges against the Harvey company? Said Fleischmann: "The reason that I am canceling the Harvey loan contract ... is not as a result of any finding on my part of moral turpitude or unfitness on the part of the Harvey company, [but] because we felt that such a large loan was not advisable if the aluminum could be obtained in any other way . . . The criminal investigation ... of Harvey resulted in a decision not to prosecute." The Government is not putting any money into the new plant. All the Government is doing, said he, is authorizing a fast tax write-off, and supplying power. Anaconda and Harvey are putting up the money.

Barring a hitch in the power negotiations, the new Anaconda-Harvey plant will bring total U.S. aluminum capacity to 1,526,000 tons by 1953 v. 692,000 before the expansion program got started.

This file is automatically generated by a robot program, so reader's discretion is required.