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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 amended 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 16th day of November A, D, 1935, now here issues this its amended 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
respondents herein that the 20th day of December A. D. 1935, at 2 o'clock in the afternoon is hereby fixed as the time and the offices of the Federal Trade Com. mission 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 amended 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 amended complaint.
You are notified and required, on or before the twentieth day after service upon you of this amended complaint, to file with the Commission an answer to the amended complaint. If answer is filed, and if your appearance at the place and on the date above stated 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 amended complaint, to be signed by its Secretary, and its official seal to be hereto affixed at Washington, D. C., this 16th day of November, A. D., 1935.
By the Commission: (SEAL)
OTIS B. JOHNSON, Secretary.
UNITED STATES OF AMERICA-BEFORE FEDERAL TRADE COMMISSION
Docket No. 2565 At a regular session of the Federal Trade Commission, held at its office in the
City of Washington, D. C., on the 29th day of December, A. D. 1936 COMMISSIONERS : Charles H. March, Chairman, Garland S. Ferguson, Jr., Ewin L. Davis, William A. Ayres, Robert E. Freer.
In the Matter of NATIONAL ELECTRICAL MANUFACTURERS ASSOCIATION, ITS OFFICERS, BOARD OF
GOVERNORS, AND CERTAIN MEMBERS, SEPARATELY AND AS REPRESENTATIVES OF
F. C. Jones, President, and Member of Board of Governors.
Board of Governors (the present personnel of said Board not being known
American Electrical Works.
FINDINGS AS TO THE FACTS AND CONCLUSION 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, on September 26, 1935, issued and served its original complaint in this proceeding and on November 16, 1935, issued and served its amended complaint in this proceeding upon the parties named in the above caption. It included said parties as respondents in this proceeding, both separately and as representatives of all the members of respondent association, charging them with the use of unfair methods of competition in violation of the provisions of said Act. After the issuance and service of said amended complaint respondents filed their respective answers thereto making general denial of the substantial allegations of said complaint. Subsequently all the respondents except Bishop Wire and Cable Corporation petitioned the Federal Trade Commission for permission to withdraw said answers and to file their substituted answers to the amended complaint, consenting therein that for the purposes of this proceeding all the material allegations of said complaint might be deemed to be admitted insofar as they relate to the business of selling power cable and “Safecote” rubber covered building wire. Pursuant to permission granted by the Commission said original answers were withdrawn by said respondents and said substituted answers were filed in lieu thereof. Said respondents also consented therein that the Commission might proceed to make its findings of fact without further proceedings and that an order to cease and desist might issue in the terms hereinafter stated.
The said Commission, having duly considered the above and being fully advised in the premises, finds that this proceeding is in the interest of the public and makes these its findings as to the facts and its conclusions of the fact and law drawn therefrom.
FINDINGS AS TO THE FACTS
Paragraph One: Respondent National Electrical Manufacturers Association is a voluntary, unincorporated organization in which the principal manufacturers of copper cable and wire for electrical transmission have membership. For each of the various kinds of power cable and wire referred to herein 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. The membership of respondent association consists of several hundred corporations, individuals, firms, and partnerships.
At tle time tle amended complaint was issued and served the following corpo. rate respondents were among the members of respondent association : American Electrical Works, Philadelphia, Pa. (a Rhode Island corporation) succeeded by Kennecott Wire and Cable Company through change of name; American Steel and Wire Co., Worchester, 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); Hab:rshaw Cable and Wire Corporation, New York, N. Y. (a New York corporation) ; Kennecott Wire and Cable Company, Philadelphia, Pa. (a Rhode Islands Corporation) successor by change of name to American Electrical Works, National Electrical Products Corporation, Pittsburgh, Pa. (a Delaware corporation); 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. Roeblings 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, X. I. (a New Jersey corporation).
The said respondent members, through the respondent association, have promoted, establis'en. and utilized within said association, a number of separate groups and sections, each of which is composed of manufacturers who produce and sell sir ilar and competing kinds of electrical wire and cable. A number of respond nt 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 sectinnal organiaztions 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, and rubber covered building wire.
Paragraph Two: The power cable and wire to which these findings relate 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. Imnregnated paper cable is used for transmitting current from power house 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 r'istributed through what is known as building wire.
Amorg the largest consumers of these commodities are public utilities, whether privately or publicly owned: municipal, state and federal governments for use in the light ng of streets, parks, highways, and public buildings: and large industrial plants and oflice buildings in carrying current for power and light,
The respon lent manufacturers specifically named in Paragraph One generally solicit, sell, and deliver these commodities directly to the larger consumers. Some of them supply the smaller requirements of such consumers and the entire requiremen's of the smaller consumers by selling and placing stocks of goods in the hands of jobbers and retailers.
Said respondent manufacturers have control of a large, valuable, and continuous trade and commerce among the several states, 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 delir. ered. To the extent that respondent manufacturers act collectively and collusively in the production and pricing of their goods they are in position to dominate the markets in which unorganized consumers must buy such goods.
Paragraph Three: The respondent manufarturers specifically named in Paragraph One, by concerted action and agreement among themselves have adopted an i put into effect the following policies, rules, practices and methods of competition :
(a) As the first step in a plan to frustrate, suppress or restrain price competition, said respondents have promoted, established, and utilized subsidiary group and sectional organizations within respondent association, composed of
manufacturers which, but for the facts herein found, would be in active competition with each other as to price and otherwise.
(b) Sail 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 said respondent manufacturers have entered into agreements and understandings that they would quote, sell, and deliver their goods a cording to identical delivered prices, terms, and sales con litions determined by the joint or cooperative action of the membạrs of the respertive groups, sections or subdivisions of respondent association organized to have jurisdiction over such goods.
Paragraph Four: As instances and illustrations of the methods used in carrying out the above plan and practice the Federal Trade Commission finds the following:
(a) Said respondent manufacturers of impregnated paper cable, of varnished cambric cable, of parkway cable, and of rubber power cable, respectively, have concerted y a opted and maintained fixed and uniform selling prices on said commodities, und r 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 sai l offers and assurances respondent manufacturers of said commodities systematically prepared, circulated, exchangưd, 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 surh 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, Porto 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 of the United States or parts of such 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 terms 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 competition among themselves, and more 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 agreements and understandings required, respondent manufacturers of said commodities, with the advice, assista nce, 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 enter