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 concertedly 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 competition 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 understanding 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 associa tion, 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 communications 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 retire the investment in such utilities. In other cases the amounts exacted become a part of utility and government operating expenses which must be borne by the consumers and rate payers. Paragraph Eleven: The above alleged acts and things done by respondents are all to the injury and prejudice of the public engaged in the purchase and resale of electric power cable and wire, electrical equipment and apparatus, of competitors engaged in the production and sale thereof, and of consumers of electricity, and constitute unfair methods of competition in interstate commerce within the intent and meaning of Section 5 of an Act of Congress entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," approved September 26, 1914. WHEREFORE, THE PREMISES CONSIDERED, the Federal Trade Commission on this 26th day of September, A. D., 1935, now here issues this its complaint against said respondents. Notice is hereby given you, National Electrical Manufacturers Association, its officers and Board of Governors, as representatives of the members, F. C. Jones, President, and Member of the Board, W. J. Donald, Managing Director, T. W. Howard, Director Uniform Accounting and Statistical Department, C. M. Cogan, Director Engineering Department, and the Board of Governors (the present personnel of said Board not being known to the Commission) and the following members of said association separately and as representatives of the remaining members: American Electrical Works. American Steel and Wire Co. Bishop Wire and Cable Corporation. General Cable Corporation. General Electric Company. Habirshaw Cable and Wire Corporation. Phelps-Dodge Copper Products Corporation. John A. Roebling's Sons Company. Triangle Conduit and Cable Company. United States Rubber Products, Inc. respondents herein that the 1st day of November, A. D., 1935, at 2 o'clock in the afternoon is hereby fixed as the time and the offices of the Federal Trade Commission in the City of Washington, D. C., as the place when and where a hearing will be had on the charges set forth in this complaint, at which time and place you shall have the right, under said Act, to appear and show cause why an order should not be entered by said Commission requiring you to cease and desist from the violation of the law charged in the complaint. You are notified and required, on or before the twentieth day after service upon you of this complaint to file with the Commission an answer to the complaint. If answer is filed, and if your appearance at the place and on the date abovestated be not required, due notice to that effect will be given you. The Rules of Practice adopted by the Commission with respect to answers or failures to appear or answer (Rule V) provide as follows: (a) In case of desire to contest the proceeding, the respondent shall, within 20 days from the service of the complaint, file with the Commission an answer to the complaint. Such answer shall contain a short and simple statement of the facts which constitute the ground of defense. Respondent shall specifically admit or deny or explain each of the facts alleged in the complaint unless respondent is without knowledge, in which case respondent shall so state, such statement operating as a denial. Any allegation of the complaint not specifically denied in the answer, unless respondent shall state in the answer that respondent is without knowledge, shall be deemed to be admitted to be true and may be so found by the Commission. (b) In case respondent desires to waive hearings on the charges set forth in the complaint and not to contest the proceeding, the answer may consist of a statement that respondent refrains from contesting the proceeding or that respondent consents that the Commission may make, enter, and serve upon respondent an order to cease and desist from the violations of the law alleged in the complaint, or that respondent admits all the allegations of the complaint to be true. Any such answer shall be deemed to be an admission of all the allegations of the complaint, to waive a hearing thereon, and to authorize the Commission, without a trial, without evidence, and without findings as to the facts or other intervening procedure, to make, enter, issue, and serve upon respondent: (c) in cases arising under Section 5 of the Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes" (The Federal Trade Commission Act), * -an order to cease and desist from the violations of law charged in the complaint. (f) Failure of the respondents to appear or to file an answer within the time as above provided for shall be deemed to be an admission of all allegations of the complaint and to authorize the Commission to find them to be true and to waive hearings on the charges set forth in the complaint. IN WITNESS WHEREOF, the Federal Trade Commission has caused this, its complaint, to be signed by its Secretary, and its official seal to be hereto affixed at Washington, D. C., this 26th day of September A. D. 1935. NATIONAL ELECTRICAL MANUFACTURERS ASSOCIATION, ITS OFFICERS, BOARD OF GOVERNORS, AND CERTAIN MEMBERS, SEPARATELY AND AS REPRESENTATIVES OF THE MEMBERS 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. 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. Phelps Dodge Copper Products Corporation. John A. Roebling's Sons Company. Simplex Wire and Cable Company. Triangle Conduit and Cable Company. AMENDED COMPLAINT Pursuant to the provisions of an Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," the Federal Trade Commission, having reason to believe that the respondents named and represented in the caption hereof have been and are using unfair methods of competition in commerce as "commerce" |