|multinational company based in Cleveland
or Kuwait, which couldn't care less because it is far removed from the
old neighborhood. Unfortunately, this sort of thing is happening with ever-increasing
Fortune magazine, which every year publishes a
list of the biggest 500 industrial corporations, may in the near future
not have 500 names to place there. To illustrate: 20 years ago, 400 companies
controlled two-thirds of this country's manufacturing assets. Today, 200
companies have a two-thirds share of these assets. With the large number
of mergers, takeovers, and consolidations reported daily in the Wall Street
Journal, that figure could go down to 100 within a decade. Immense conglomerates
such as International Telephone and Telegraph (IT&T) are continually
expanding into new ventures -- bread, rental cars, and hotels, for example.
IT&T exemplifies the kind of conglomeration
which is infiltrating all of our major industries. The parent company alone
has over 40 divisions, ranging from avionics to defense communications
to drills, pumps and compressors. Among its more than 70 subsidiaries are
the Hartford Insurance Company, Sheraton Hotels, Continental Baking Company,
Gwaltney Foods, and, until recently, Avis Car Rental. There is scarcely
an area of our lives not touched by the long arm of IT&T. I don't think
we get better hotel rooms or high-fiber bread because IT&T gobbles
up Sheraton or Continental Bakeries.
To illustrate further, consider that three companies
sell 80 per cent of all cold breakfast food in this country. One company
sells 90 per cent of our canned soup. Three companies produce more than
90 per cent of all American-made cars. In this age when many people realize
the need to use insulation to conserve energy in their homes, three companies
control 80 per cent of the market in insulating materials.
I am concerned not only about bigness in the marketing
of products but also about monopolies in the market-place of ideas -- the
publishing and broadcast industries. 71 per cent of all newspaper circulation
in this country is controlled by chains such as Gannett, Knight-Ridder,
and the Hearst empire. As people draw their news from fewer and fewer sources,
information flow is under the control of a smaller group of people, whose
biases and perceptions could color what they provide us to read.
Conglomerates are making themselves evident in
the book industry as well as in newspapers. Gulf and Western, the conglomerate
involved in the film industry, also owns Simon and Schuster publishers.
CBS, the familiar "eye" of television, has acquired Holt, Rinehart and
Winston as well as Fawcett paperbacks. Several newspaper publishers now
own book-publishing subsidiaries.
Why is concentration in the communications industry
so disturbing? It is because of the enormous power this industry wields
over people, behavior, and ideas. We ought to question the increasing disappearance
of locally-owned and edited newspapers.
|Worrisome is the loss of leadership
which local newspapermen provided, and the absence of publishers and editors
with roots in the community. These home-grown editors have been an independent
voice in our cities and towns, and they often had the power and the backbone
to blow the whistle on crooked politicians and promoters.
Not all newspaper chains are bad, and not all
independent newspapers are good. But if the day comes when all newspapers
look and read alike, when there is no more difference between them than
between one mass-produced burger and another -- then we will have lost
something vital in our society. Some chain publishers, I might add, ponder
this issue too, and look for ways to insure diversity within the "family."
OIL -- LOOK OUT, SUN
As I have emphasized over the years, the oil companies
of this country are a striking example of economic gigantism, of bigness
gone wild. For this reason, I approach the issue of energy conglomeration
with a strong inclination to want that industry broken up, or divested,
into more controllable forms. When I call for breaking up the oil companies,
I do so as a believer in free enterprise. We need these companies, and
they need to be quite large with a great deal of capital to justify the
risks involved in finding undiscovered oil and gas reserves. However, we
will never have a successful national energy policy unless we divest these
multinational behemoths of the grip they now hold on almost all of our
No energy program will ever succeed without basic
changes in the way Americans live and travel and work. No matter how many
times the President appears on our television screens asking for sacrifice,
until the oil companies themselves are willing to make some sacrifices,
the American people will continue to believe, as do a majority of those
who responded to my recent constituent questionnaire, that they are being
ripped off, that the energy crisis is not real, that this "crisis" is only
a creature of big oil that will fatten profits.
Perhaps the only way to break through this barrier
of skepticism is through vertical and horizontal divestiture of the energy
conglomerates. A look at the status of these companies in our economic
structure illustrates my point:
The most apparent measure of corporate strength
is size. And for size, nothing can beat Big Oil. The 1977 Fortune 500 list
shows Exxon as the biggest of all. Five of the top seven corporations on
the list are oil companies. Indeed, if, as I have suggested, Exxon were
broken up, its producing division alone would be the fourth largest company
in America. Exxon in its present form is really too huge to be thought
of as a mere corporation. If it were a sovereign nation, its gross national
product would exceed that of all but a small number of countries.