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the major charges of the complaint; and that they believe trial and the judgment of the court will actually be of assistance to Congress in clarifying and dissi pating the web of misinformation which has been carefully built up about “Wall Street" and the securities business. In the meantime I venture for myself to suggest that the committees of Congress can best serve the public interest by keeping out of your own record the proof which the Department of Justice has undertaken to place before the court, because in your record the evidence cannot be evaluated but in the court it can. It is the duty of the judicial arm to evaluate evidence, and the courts are specially qualified and equipped for that purpose. I trust that your Subcommittee will not relieve Government counsel of the burden of proving allegations which we expect to show to be untrue.

As Subcommittee counsel has taken the step of bringing before you these four exhibits for identification from the investment bankers suit, perhaps you would be good enough to see that this letter of explanation and protest is inserted in the record of your Subcommittee with appropriate reference thereto at the page of the transcript where the offer of documents was made. Respectfully yours,


JULY 6, 1950. Mr. Ralph M. CARSON, Davis, Polk, Wardwell, Sunderland, and Kiendl,

15 Broad Street, New York 5, N. Y. DEAR MR. CARSON : I have your letter of June 22 addressed to Hon. Earl C. Michener. The documents to which you refer were introduced into the record because of their relevancy to the history of the financing of steel companies. Before these documents were introduced, I had been assured that they were public documents, and that one of the documents was a TNEC document. So far as I can now tell, only one of these documents, namely, the document marked “1208," was neither a TNEC document nor was its authenticity admitted, although it is a public document. I am told that all the other documents have had their authenticity as documents admitted or are TNEC documents. Since these documents all appear to me to be relevant to the history of steel financing, I think they were appropriately before a legislative committee investigating steel.

I can assure you that there is no disposition to “try” the investment bankers' case before this Subcommittee or, for that matter, to "try" any pending antitrust action before this Subcommittee.

The correction which you have made concerning the Bankers Trust Company has been made, and I will be happy to have a note put in with reference to the document marked "1208." Sincerely yours,



15 Broad Street, New York 5, N. Y., July 7, 1950. Hon. EMANUEL CELLER, Committee on Judiciary, House of Representatives ofice Building,

Washington, D. C. DEAR MR. CELLER : Thank you for your letter of July 6th responding to mine of June 22nd to Hon. Earl C. Michener with respect to four exhibits for identification from the so-called investment bankers case (United States v. H. S. Morgan et al. Civ. 43–757 Southern District of New York) introduced April 25th in the record of your Subcommittee on Study of Monopoly Power,

There was no thought on our part of course to interfere with the production of evidence pertinent to any inquiry before a legislative committee. We had had some intimation that an attempt would be made to use Congressional investigations as a sounding board for the charges made in the antitrust suit referred to, on account of a belief entertained by some on the Government side that they cannot win their case in court. I am very glad to receive the assurance that any such attempt would not be countenanced by your Committee. Sincerely yours,


96347--50_ser. 14, pt. 45-47


Docket No. 2565

In the Matter of



F. C. Jones, President, and Member of Board of Governors, W. J. Donald, Managing Director, T. W. Howard, Director Uniform Accounting and Statistical Department, C. M. Cogan, Director Engineering Department; and all the members of its Board of Governors (the present personnel of said Board not being known to the Commission); and the following members of respondent association, separately and as representatives of the remaining members;

American Electrical Works
American Steel and Wire Co.
Anaconda Wire and Cable Co.
Bishop Wire and Cable Corporation
Boston Insulated Wire and Cable Co.
Crescent Insulated Wire and Cable Co.
General Cable Corporation
General Electric Company
Habirshaw Cable and Wire Corporation
National Electrical Products Corporation
The Okonite Company
Phelps Dodge Copper Products Corporation
John A. Roebling's Sons Company
Simplex Wire and Cable Company
Triangle Conduit and Cable Company
United States Rubber Products, Inc.


Pursuant to the provisions of an Act of Congress approved September 28, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," the Federal Trade Commission, haring reason to believe that the respondents named and represented in the caption here of have been and are using unfair methods of competition in commerce as "commerce" is defined in said Act and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows:

Paragraph One : The members of respondent association and of its various groups, sections and divisions, consist of several hundred corporations, indi. viduals, firms and partnerships, their number varying from time to time by the separation of some and the addition of others, so that it is impracticable at any given time to name as respondents and to bring before the Commission each and all the members without manifest delay and inconvenience. Therefore, the Commission names and includes as respondents in this proceeding, both separately and as representatives of all the members of the association, the following officers: F. C. Jones, President, and Member of Board of Governors; W. J. Donald, Managing Director ; T. W. Howard, Director Uniform Accounting and Statistical Department; C. M. Cogan, Director Engineering Department: the board of governors (whose present membership is not known to the Commission) and the following members of respondent association: American Electrical Works, Philadelphia, Pa. (a Rhode Island corporation); American Steel and Wire Co., Worcester, Mass. (a New Jersey corporation); Anaconda Wire and Cable Co., New York, N. Y. (a Delaware corporation) ; Bishop Wire and Cable Corporation, New York, N. Y. ( a New York corporation); Boston Insulated Wire and Cable Co., Boston, Mass. (a Massachusetts corporation) ; Crescent Insulated Wire and Cable Co., Trenton, N. J. (a New Jersey corporation); General Cable Corporation, New York, N. Y. (a New Jersey corporation); General Electric Company, Schenectady, N. Y. (a New York corporation); Habirshaw Cable and Wire Corporation, New York, N. Y. (a New York corporation); National Electrical Products Corporation, Pittsburgh, Pa. (a Delaware corpora

tion); The Okonite Company, Passaic, N. J. (a New Jersey corporation); Phelps Dodge Copper Products Corporation, New York, N. Y. ( a New York corporation); John A. Roebling's Sons Company, Trenton, N. J. (a New Jersey corporation); Simplex Wire and Cable Company, Boston, Mass. (a Massachusetts corporation); Triangle Conduit and Cable Company, Brooklyn, N. Y. (a New York corporation); United States Rubber Products, Inc., New York, N. Y. (a New Jersey corporation).

Paragraph Two: The power cable and wire with which this proceeding is chiefly concerned are used for the transmission of electric current of large voltages. Much of it is copper wire insulated by various processes to meet the special needs of various classes of customers. Impregnated paper cable is used for transmitting current from the powerhouse to substations and other outlets, where, depending on the use to which it is to be put, the current is diverted into varnished cambric, rubber power or parkway cable. Where used in buildings for lighting purposes, the current is distributed through what is known as building wire. Bare and weatherproofed wires are used for overhead transmission across long stretches of country and among other uses, for overhead trolleys on electric railways.

Among the largest consumers of these commodities are public utilities, whether privately or publicly owned; municipal, state, and federal governments for use in the lighting of streets, parks, highways, and public buildings; and large industrial plants and office buildings in carrying current for power and light.

Respondent manufacturers solicit, sell, and deliver these commodities directly to the larger consumers. They supply the smaller requirements of such consumers and the entire requirements of the smaller consumers by selling and placing stocks of goods in the hands of jobbers and retailers.

Respondent manufacturers have control of a large, valuable, and continuous trade and commerce among the several states in the goods with which this proceeding deals, and in the course of such trade and commerce ship, transport and deliver large quantities of material and finished products across state lines, or cause them to be so transported and delivered. To the extent that respondent manufacturers act collectively and collusively in the production and pricing of their goods they are in position to dominate and manipulate the markets in which unorganized consumers must buy such goods.

Paragraph Three: Respondent National Electrical Manufacturers Association is a voluntary, unincorporated organization composed of the principal manufacturers of copper cable and wire for electrical transmission. It also includes in its membership manufacturers of electric tools, and a large variety of electrical equipment and apparatus. For each of the commodities with which this complaint deals the members of respondent association collectively produce, sell, and distribute the major part, and in some cases all, of the output of such commodities in the United States.

In order to accomplish more effectively the purposes of the combination and conspiracy hereinafter alleged, respondent association, its officers, board of governors, and members, have promoted, established, and conducted within said association, a number of separate groups and sections, each of which is composed of manufacturers who produce and sell similar and competing kinds of electrical wire and cable or similar and competing kinds of electric tools and of electrical equipment and apparatus. A number of respondent members are manufacturers of more than one kind of the commodities referred to and accordingly affiliate themselves with more than one of the group and sectional organizations within respondent association, making separate contributions to the support of each such group. Among such groups are the respective manufacturers which produce impregnated paper cable, varnished cambric cable, rubber power cable, parkway cable, rubber covered building wire, bare and weatherproofed wire, rigid steel conduit, fibre underground conduit, outlet boxes, and electric tools.

Paragraph Four: The aforesaid respondent association, its officers, board of governors, and members, have been and are engaged in a wrongful and unlawful combination, conspiracy, and agreement in and affecting trade and commerce in power cable, copper wire for electrical transmission, and various kinds of electrical apparatus and equipment throughout the United States and its possessions, for the purpose and with the effect of unduly and unreasonably restricting, restraining, and obstructing competition in the sale of such goods. To that end the respondents by concerted action and agreement among themselves have adopted and put into effect the following policies, rules, practices and methods of competition :

(a) As the first step in their plan to suppress or restrain price competition, respondents have created, organized and conducted subsidiary group and sectional organizations composed of manufacturers which, but for the activities herein alleged, would be in active competition with each other as to price and otherwise.

(b) Respondents have promoted and held frequent meetings and conferences among the members of the various groups, sections, and subdivisions of the association, and have systematically exchanged price information among such members. In the course of such activities respondents have entered into agreements and understandings that they would quote, sell, and deliver their goods according to identical prices, terms, and sales conditions determined by the joint or cooperative action of the members of the respective groups, sections or subdivisions of respondent association organized to have jurisdiction over such goods.

Paragraph Five: As instances and illustrations of the methods used in carrying out the above alleged conspiracy the Federal Trade Commission alleges the following:

(a) Respondent manufacturers of impregnated paper cable, of varnished cambric cable, of parkway cable, and of rubber power cable, respectively, have cun certedly adopted and maintained fixed and uniform selling prices on said commodities, under the leadership of and in cooperation with respondents, The Okonite Co., the General Electric Co., and the Habirshaw Cable and Wire Corporation. The last-named respondents compiled, printed, and circulated among the other respondent manufacturers of said commodities exceedingly complex and detailed price lists, offering and assuring such other respondent manufacturers. their competitors, that if the latter would not quote and sell at less than the list prices of the respective compilers, then said compilers would maintain the prices in their respective lists and would immediately notify their said competitors of all proposed changes in price or in the methods of calculating same. Acting upon said offers and assurances respondent manufacturers of said commodities systematically prepared, circulated, exchanged, adopted, and used, the price lists so compiled as the amount to be quoted to and obtained from their customers, for the purpose and with the effect of avoiding and suppressing price competitiou among all of respondent manufacturers of said commodities.

(b) In the compilation, adoption, and use of said price lists, it was understood and agreed among said respondent manufacturers that no customer should be allowed to purchase except on a delivered price basis. Pursuant to such under: standing and agreement, said price lists embodied and contained only delivered prices and the formula by which such prices were to be calculated. As to some products the price lists specified a single delivered price to be paid by all customers throughout the United States and including Panama Canal Zone, Puerto Rico, Hawaiian Islands, and Alaska. As to other products, the price lists specified a single delivered price to be paid by all customers throughout and within each of a number of price zones, each composed of a number of States or parts of States. The purpose of said delivered price policy was to prevent respondent manufacturers from allowing differences in the proximity of any given customer to their respective plants, to create any difference in the amount to be paid by him delivered from any source of supply.

(c) For the purpose and with the effect of further suppressing price competition among themselves, respondent manufacturers of said commodities supplemented said uniform delivered price lists by imposing a uniform charge for the large wooden reels on which cable is wound for delivery and a uniform allowance for the return of such reels. Said price lists included a uniform charge for the return freight on such reels, which charge, in some cases, was more and in other cases less than the actual cost of such return freight to the plant of a given manufacturer.

(d) For the purpose and with the effect of further suppressing price competition among themselves, respondent manufacturers of said commodities adopted uniform term of sale, including uniform discounts for quantity and for prompt payment, uniform grades and specifications, and uniform methods of calculating prices on goods which varied from such uniform grades and specifications.

(e) For the purpose and with the effect of further suppressing price competi. tion among themselves and specifically for the purpose of ascertaining if, when, and to what extent any of respondent manufacturers had deviated in actual transactions from the identical delivered price or from any factor therein which their conspiracy and combination demanded, respondent manufacturers of said commodities, with the advice, assistance, and cooperation of respondent association, adopted and carried on a system under which they agreed to report and

did report to each other upon the request of any member of their respective groups, detailed information as to the prices and all factors entering into or affecting the prices which they had quoted on particular transactions. For a similar purpose and effect, respondent manufacturers have exchanged communi. cations and held meetings and conferences at which investigations were made into cases of alleged price cutting and where any such offenders were criticized or otherwise disciplined by their competitors.

(f) As an incident to and a necessary result of said delivered price policy respondent manufacturers habitually and systematically discriminated in price, after making due allowance for the cost of transportation, among their various customers, exacted higher prices from customers having little or no transportation expense, and accepted lower prices from those having heavy transportation expense. As a further result of said delivered price policy, customers located at or near the place of manufacture and shipment were deprived of the advantage of such location and were required to contribute to the cost of transportation of more distant customers, notwithstanding that such customers frequently were in competition with each other. As a further result of such policy, respondent manufacturers charged and collected from many of their customers, in the guise of transportation and delivery charges, more, and from others of their customers, less, than the actual cost thereof.

Paragraph Six: Respondent manufacturers of rubber covered building wire, through cooperative group activities within respondent association, have fixed the selling price of a patented kind of such wire under cover of a so-called licensing contract between themselves as licensees and respondent National Electrical Products Company as owner of the patent and licensor. Said contract is not a valid licensing contract under the patent laws in that, among other things, the licensees and licensor, being competitors of each other, jointly determine the identical price which they desire to obtain from their customers and then go through the formality of having same named and imposed by the licensor on the licensees under said agreement.

Paragraph Seven: Respondent manufacturers of the commodities named in Paragraphs Five and Six have adopted identical discounts from their published list prices to cover sales to jobbers and have required of jobbers that they resell said commodities at the list price in order that there may be no price competition among their respective jobbers or between the jobbers and manufacturers, respectively, supporting such requirement by jointly determining the status and eligibility of jobbers, by detection of failures by jobbers to maintain the prescribed resale price, and by refusal to supply goods to such jobbers.

Paragraph Eight: Some of the above alleged agreements, understandings, policies, and concerted practice of avoiding and suppressing price competition have been carried on continuously since 1929 or longer, but respondent association, as Code Authority to administer the code adopted by the industry under the National Industrial Recovery Act, used, interpreted, and applied various provisions of said Code for the purpose and with the effect of supporting, supplementing, and reinforcing such agreements, understandings, policies, and practice.

Paragraph Nine: Respondent members and manufacturers comprising various groups and sections of respondent association other than those whose activities are described in Paragraphs Five, Six, Seven, and Eight of this complaint have engaged in cooperative efforts to eliminate and suppress price competition among themselves by the use of methods and devices similar to but not identical with or confined to those alleged in said paragraphs.

Paragraph Ten: By means of the aforesaid agreements, understandings, rules, policies, and cooperative practices respondents have taken away from purchasers of power cable and electrical transmission wire, and of other electrical apparatus and equipment the advantages of normal competition which formerly existed and would otherwise exist among respondent manufacturers. Respondents thereby compelled unorganized purchasers to purchase such commodities at prices and on terms determined collectively and collusively by respondents and artificially enhanced the amounts exacted from such purchasers above the amounts obtainable had there been no such determination. The amounts so exacted from public utilities whether publicly or privately owned and from municipalities and the government as an incident to the transmission of electric light and power in some cases become a part of the permanent investment on which consumers of electricity are called upon to pay a continual return, or if publicly owned, at least sufficient to

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