Is big really better? Corporations seem to think so
Washington — The Reagan administration may decry centralization of government authority, but it apparently is much less bothered by corporate bigness. A flurry of corporate merger attempts now is under way in the United States as the government spokesmen advocate relaxation of US antitrust laws. Cash-rich US oil companies are looking for corporate acquisitions partly because of the more-favorable White House climate.
Here are developments in the merger boom:
* E.I. du pont de Nemours & Co., the biggest US chemical firm, made a $7.3 billion bid July 6 to buy Conoco, America's ninth-largest oil company. It is the largest corporate merger proposal in history.
* First-quarter merger bids in the US set a record of $17.5 billion. By October, merger bids for 1981 may have already surpassed the full-year merger record set in 1980 -- $44.3 billion.
* Antitrust policy has been "misguided and mistaken" in some instances, says Attorney General William French Smith, who declares "bigness doesn't necessarily mean badness."
* Reports come of administration efforts to settle the 12-year antitrust suit against International Business Machine Corporation and the seven-year suit against American Telephone & Telegraph Company.
* Reagan appointees to the agency enforcing antitrust regulations, the Federal Trade Commission, indicate they will reexamine policy toward violations of the landmark antiprice-discrimination Robinson-Patman Act.
All this seems to run counter to the big US trust-busting drive of the late 19th and early 20 centuries.
President Grover Cleveland told Congress in 1888 that "corporations . . . are fast becoming the people's masters." In 1980 Sen. John Sherman (R) of Ohio denounced "vast combinations to control production and trade. President Theodore Roosevelt in 1908 urged "federal control over all combinations engaged in interstate commerce. . . ." Presidential candidate Woodrow Wilson in 1912 charged that monopolies controlled the government.
Now sentiment has moderated. In 1978 former Solicitor General Robert Bork argued in his book, "The Antitrust Paradox," that competition may dull, not sharpen efficiency. Business circles charge that US corporations are handicapped abroad by antitrust laws that forbid them from cooperating or merging.
The Reagan administration now is formulating its own policy toward business bigness. President Reagan directs more attention to the dangers of big government than of big business.
Rep. Timothy E. Wirth (D) of Colorado, chairman of the House Communications Subcommittee, urged Reagan in a July 2 letter to reject recommendations that the Justice Department drop the landmark antitrust case against AT&T. Dismissal of the suit would sent the "wrong message" about the credibility of antitrust laws, Congressman Wirth urged. The White House has not commented.
William Baxter, new chief of the Antitrust Division of the Justice Department , recently praised large corporations for their efficiency. An titrust laws should have only one goal, he said: efficiency.