Folklore of Magnesium

A Federal grand jury in New York last week indicted Aluminum Co. of America, four other U. S. firms and seven of their officers for conspiring with I. G. Farben-industrie to discourage production of magnesium in the U. S. Claiming to have found "starling evidence of German influence," the Justice Department called the case its "most important in a year."

The "German influence" was Trustbuster Thurman Arnold's way of fighting Hitler with headlines. When the New Deal debated last summer whether to quit its trustbusting efforts for the duration of the defense effort, Thurman Arnold changed his tactics. Instead of attacking trusts for sins against a free economy, he attacked them for sins against defense. To reporters he talked darkly about patent monopolies through which German firms were holding up prices and production in the U. S. He talked particularly about magnesium, in which Aluminum Co. of America holds important patents jointly with the famous I. G. Farbenindustrie (German Dye Trust).

Magnesium weighs 33% less than aluminum, 75% less than steel. As strong (in tensility) as the best cast iron, it can be used in airplane motors, crankcases, landing wheels, pontoons; the weight it saves can then be switched to gasoline or bomb load. It also has important military use in lightweight bomb casings and (because of the inflammability which once made it invaluable to photographers as flashlight powder) in parachute flares, incendiary bombs, tracer bullets. German production, according to Arnold, has jumped 500% since 1938 (to an estimated 25,000 tons last year).

Although magnesium is plentiful in nature (it occurs in sea water), it is difficult to extract and fabricate, requires a special coating to protect it from corrosion and combustion. Arnold's indictments charged that patents on these processes had been used to set up monopoly control. Named chief co-defendants with Alcoa and I. G. Farbenindustrie were American Magnesium Corp. (half owned by Alcoa), which is the chief U. S. processor of magnesium, and Dow Chemical Co., which in 1927 developed a native American process for extracting the metal from Michigan brine wells.

According to the indictments, Alcoa stopped manufacturing magnesium in 1927 and began buying it from Dow; Alcoa and I. G. Farbenindustrie also formed a patent combine (later joined by Dow) which refused to grant fabrication licenses to other processors except on condition that they buy from Dow. The alleged result: Dow was left the only U. S. producer, and the price of magnesium (now 27-c- a pound) was maintained about 50% over the price of aluminum (now 17-c-). The indictments asserted that Dow had delivered magnesium in Germany for less than its f.o.b. price in the U. S. (21-c- a pound when the U. S. price was 30-c-); also that Alcoa and I. G. Farbenindustrie had an agreement whereby neither would start producing the raw material without offering equal participation to the other.

All the defendants except I. G. Farbenindustrie (which the Justice Department cannot force into court) immediately disclaimed German influence and wrongdoing. Whether Alcoa's control of a metal competitive with aluminum was good or bad, collusion was not necessary to explain why the U. S. magnesium industry is so small. Its market is new and limited; it has only recently become sufficiently corrosion-proof to be widely used in U. S. Navy planes. In 1938 the total U. S. consumption of magnesium was only 2,400 tons. This year the industry's capacity will reach 12,500 tons.

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