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that they had no control over the election of their directors, and second, that the resignation of the defendant, Myron A. Wick, as a director of the defendant, Delaware River Steel Company, made the case moot as against them. The motion of the defendant, Myron A. Wick, was on the ground that his resignation as a director of the defendant, Delaware River Steel Company, made the case moot as against him. The cause coming on to be heard upon the said motions, the petition, the answers of the defendants, and the statements and argument of counsel, and it appearing to the court that Myron A. Wick has resigned from the Board of Directors of Delaware River Steel Company; that the petition does not allege that the defendants, Republic Steel Corporation and Delaware River Steel Company, have any director other than Myron A. Wick who is also a director of any two of the corporate defendants; and that the petition does not allege that the defendant, Myron A. Wick, is a director of any other corporate defendant other than Republic Steel Corporation and Delaware River Steel Company; and there being no evidence of bad faith, or of any intention on the part of Myron A. Wick, Delaware River Steel Company, or Republic Steel Corporation to resume, or permit to be resumed, the relationship complained of in respect of said defendants; and the court being of the opinion that said defendants have no intention of resuming such director relationship; and it further being the opinion of the court that there are no other issues or questions in litigation in respect of said defendants;
Now, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the motions of the defendants, Myron A. Wick, Delaware River Steel Company, and Republic Steel Corporation, be, and the same hereby are, sustained on the sole ground that the case is moot as against said defendants; and that the petition be, and the same hereby is, dismissed as against the defendants, Myron A. Wick, Delaware River Steel Company, and Republic Steel Corporation, but without costs. To all of which the petitioner excepts.
JONES, Judge. DECEMBER 19, 1935. APPROVED: For the United States of America :
Special Assistant to the Attorney General. APPROVED: For the defendants, Republic Steel Corporation, Delaware River Steel Company, Myron A. Wick:
GROVER HIGGINS, Solicitor.
DISTRICT COURT OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF OHIO
Equity No. 5153
United States of America, petitioner, v. William G. Mather, et al., defendants
MOTION TO DISMISS The United States of America, petitioner, by Walter L. Rice, Special Assistant to the Attorney General, and E. B. Freed, United States Attorney, respectfully move this Court for a dismissal of the petition, but without prejudice to the right to institute any new proceedings against defendants S. Livingston Mather, George T. Bishop, Myron A. Wick, The Youngstown Sheet & Tube Company, The Otis Steel Company, Republic Steel Corporation, and Delaware River Steel Company, for the following reasons:
1. After filing of the petition herein, February 6, 1935, defendant George T. Bishop resigned from the Board of Directors of the Cleveland-Cliffs Iron Company, Myron A. Wick resigned from the Board of Directors of Delaware River Steel Company, and S. Livingston Mather and Georgt T. Bishop were not reelected as directors of The Youngstown Sheet & Tube Company. By virtue of said resignations and failure to reelect directors, certain interlocking directorships which the petition sought to enjoin were discontinued, and the relief sought by the petition to that extent was attained.
2. After said resignations and failure to reelect directors, the defendants affected by such action filed motions to dismiss, on the ground that the case
had thereby become moot as to them. Said motions were granted as to defendants George T. Bishop, Myron A. Wick, Delaware River Steel Company, and Republic Steel Corporation. In granting said motions the Honorable Paul Jones, United States District Judge for the Northern District of Ohio, stated in open court on December 2, 1935 :
I am certain these parties defendant would not be in any position in this court, have any standing, if they were brought back here again and charged with resuming the relationship, the dissolution of which they have urged as
a basis for sustaining the motion. and that, in effect such resumption of the relationship charged
would amount to a fraud on the court; because the court in sustaining this motion would have the right to assume that the cessation of the relationship was intended to be of a permanent character and obviate the necessity of the court's hearing the whole case and making a determination which would
require the granting of a permanent injunction. Since it now appears that said defendants do not intend to resume said interlocking directorships, petitioner does not desire to proceed further by appeal from the order granting said motions.
3. Since the filing of the petition herein, defendants McKinney Steel Holding Company and The Corrigan, McKinney Steel Company, in both of which The Cliffs Corporation and The Cleveland-Cliffs Iron Company had direct and/or indirect common-stock holdings (as set forth in the petition), have been dissolved; and therefore further proceedings against defendants The Cliffs Corporation, The Cleveland-Cliffs Iron Company, McKinney Steel Holding Company, The Corrigan, McKinney Steel Company, The Otis Steel Company, Inland Steel Company, William G. Mather, D. Т. Croxton, Cyrus S. Eaton, and William B. Burwell appear to be unnecessary.
WALTER L, RICE, Special Assistant to the Attorney General.
E. B. FREED, United States Attorney for the Northern District of Ohio. FEBRUARY 11, 1936.
DEPARTMENT OF JUSTICE,
February 11, 1936. United States District Judge Paul Jones (Northern District of Ohio) today signed an order on motion of the Government permitting the withdrawal without prejudice of its suit against 10 steel corporations and seven individuals al. leged to be interlocking directors in two or more of those corporations. After filing of the suit, February 6, 1935, several of the directors resigned or were not elected as directors of defendant corporations, and as a consequence those interlocking directorships ceased. The United States District Court concluded that such voluntary dissolution of the interlocking directorships was intended to be of a permanent character, and this obviated the necessity of an extensive trial.
In addition, since the filing of suit, McKinney Steel Holding Company and The Corrigan, McKinney Steel Company, two of the defendants, have been dissolved. Two of the other defendant corporations, The Cliffs Corporation and The Cleveland-Cliffs Iron Company, had been made defendants primarily because of their common stock holdings in the two corporations which are now dissolved.
The primary relief sought by the petition having been attained, the Department has concluded that further proceedings in this case will be unnecessary.
The defendants named in the suit include The Youngstown Sheet & Tube Company, Inland Steel Company, Wheeling Steel Corporation, The Otis Steel Company, Delaware River Steel Company, Republic Steel Corporation, The Corrigan, McKinney Steel Company, McKinney Steel Holding Company, The ClevelandCliffs Iron Company, The Cliffs Corporation, William G. Mather, S. Livingston Mather, D. Т. Croxton, Cyrus S. Eaton, George T. Bishop, William R. Burwell, and Myron A. Wick.
REPUBLIC STEEL CORPORATION,
Cleveland, Ohio, August 2, 1950. Re United States v. William G. Mather, Equity No. 5153, Northern District
of Ohio. Honorable EMANUEL CELLER, Chairman, Subcommittee on Study of Monopoly Power,
Old House Office Building, Washington, D. C. DEAR CONGRESSMAN CELLER: With reference to your letter of July 26, 1950, concerning the above-captioned case, we submit the following for insertion as part of the record in the hearings before the Subcommittee on Study of Monopoly Power.
1. The only charge in the petition in United States v. William G. Mather, et al., so far as it involved Republic Steel Corporation, was that Myron A. Wick was a director of such corporation and also a director of Delaware River Steel Company, a small steel company which had only one blast furnace that had not been in operation since 1930.
2. On March 14, 1935, Mr. Wick resigned as a director of Delaware River Steel Company and so far as we know such resignation was permanent.
3. Thereafter on November 21, 1935, motions were filed to dismiss the petition as to Republic Steel Corporation, Delaware River Steel Company, and Mr. Wick, such motions being sustained by District Court order dated December 19, 1935, on the ground that “the case is moot as against said defendants."
4. On February 11, 1936, counsel for the Government filed a motion to dismiss the petition with respect to all defendants. Such motion in referring to the resignation of Mr. Wick stated that by virtue thereof the relief sought by the petition was to that extent attained.
5. On the same day, a District Court order was entered sustaining this motion but without prejudice to the right to institute new proceedings against certain defendants including Republic Steel Corporation, Delaware River Steel Com. when the petition was filed and there is no charge in the petition either that pany and Myron A. Wick, but not including The Cliffs Corporation, The Cleveland-Cliffs Iron Company, or William G. Mather.
6. Mr. William G. Mather was not a director of Republic Steel Corporation he was or that it would be a violation of the law if he were.
7. Moreover, since the entry of the above orders, Republic Steel Corporation has assiduously observed the admonition of the Court against the resumption of the interlocking directorship charged in the petition. In fact, Mr. Wick ceased to be a director of this Corporation on July 1, 1941.
8. In view of the foregoing, the implication in your remarks on pages 426 and 428 of the official transcript that Republic Steel Corporation by having Mr. William G. Mather later become a director was a violation of the Court's orders is clearly unwarranted and such remarks should be publicly withdrawn.
I am returning herewith the papers enclosed with your letter of July 26 as follows:
Petition of the United States
Steel Company, and Myron A. Wick
Press release, Department of Justice, February 11, 1936.
T. F. PATTON,
CONCLUSIONS AND RECOMMENDATIONS IN SAWYER REPORT TO PRESIDENT
The following are among the conclusions, recommendations, and suggestions contained in the report made by Secretary of Commerce Sawyer to President Truman on the major policy issues that need to be resolved in order to achieve maximum effectiveness and consistency of Federal programs in the transportation field:
There is a conflict in the "legislative mandates” to the various regulatory bodies.
There is a need for more specific standards for the guidance of the regulatory bodies.
Federal promotional activities in the field of transportation should be reexamined.
Federal transportation policy must give major attention to sound and healthy railroads as a part of the transportation system.
Group all proinotional activities under un dir tio and con ol.
Consideration should be given to recomendations of Hoover Commission for grouping promotional and research activities.
User charges on subsidized or partly subsidized transportation systems should be studied.
Reexamine ship construction and operating subsidies.
Do not consider regulation of private carriers until there has been a study to determine if such regulation would result in more adequate and less costly transportation; with similar recommendation in connection with proposals to bring more water carriers under Interstate Commerce Commission regulation, more foreign shipping lines, including tramp shipping, under Maritime_Commission, and to bring air contract carriers under Civil Aeronautics Board regulation.
Regulatory bodies should require that rates be related to fully distributed costs.
Maritime Commission should aid development of competition in international shipping by lines outside established conferences.
Control of financial practices of carriers is justified where there is limited monopoly.
Financial practices of subsidized air carriers should be regulated.
Air data suggests substantial savings possible through elimination of marginal services, reduction of unnecessary duplication of facilities and routes, and through a general tightening of managerial efficiency.
Water carriers need to improve terminals, and to develop new techniques for loading, unloading, and carrying cargo.
Consolidations are urgently needed in the railroad field.
Greater railroad efficiency is needed; this may involve mixture of compulsion and incentive, the latter including immediate consideration of more liberal abandonment policy, with further incentives to be explored.
Give consideration to adoption of Commissioner Alldredge's plan for small shipments, i. e., that Post Office carry everything up to 70 pounds.
Reconsider method of paying for rail transportation of mail, and review mail pay act in light of modern postal requirements and existing transportation services.
Give Post Office right to negotiate rates less than maximum prescribed by Commission, as other shippers do.
Rapid growth of air transportation means Interstate Commerce Commission and Civil Aeronautics Board cannot exist side by side without the possibility of serious conflict between them.
Desirability of consolidating regulatory functions will increase with passage of time. However, main problem now is whether advantages of consolidation would outweigh considerations that led to establishment of separate agencies for shipping and air transport. No attempt to answer question now, but thought
expressed that it is probable a consolidation of regulatory controls will eventually be necessary.
Most Federal promotional programs have been pursued independently without reference to a coherent balanced program for transport industry as a whole.
If regulatory authorities, as asserted, discourage traffic diversion from rails by requiring motor and water carriers to maintain rates closely related to rail rates rather than to their own costs, they nullify to a degree promotional activities of Government in providing waterways and highways.
Studies should be made to determine whether motor carriers as a whole, or various classes, are in fact paying adequate user charges for use of highways, or are being indirectly subsidized.
There is no question but that subsidies are conferred on water and air carriers by which they are given definite advantage over railroads. Studies should be made to determine extent of advantages and whether present policies should be changed.
Restriction of right to enter transport business, and restrictions on commodities that may be carried, minimize use that might be made of highways, airways, and waterways provided by Federal Government.
Where practicable, subsidies for national defense should be charged to the budget of the National Military Establishment.
Study undertaken by National Security Resources Board in connection with mobilization planning makes it premature and inappropriate to undertake to evaluate adequacy of transportation system,
Outright subsidies should be provided for transport services where clearly necessary for defense, but only when not obtainable without subsidy.
Stockpiling of transport equipment would result in equipment becoming obsolete; better to keep the equipment in use.
Government should have effective machinery to direct and control use of transportation plant in time of emergency, and present “diffused character" of Federal regulatory controls and responsibilities is not conducive to prompt and effective emergency coordination.
Agency having over-all responsibility for major transportation programs and policies of government in peacetime would furnish good nucleus for necessary wartime control agency or agencies.
There should be close supervision of rate conference activities. Unless regulatory bodies exercise effective supervision, and more definite standards are de reloped for prescribing rates, consideration should be given to repeal of legislation such as the Bulwinkle Act, and acts giving the Maritime Commission and the Civil Aeronautics Board power to approve conference agreements and thus relieve carriers from antitrust prosecution,
More vigorous action should be considered to require establishment of economically justified joint rates, and the law could be amended to empower regulatory authority to require establishment of such rates.
Whichever carrier can perform transportation service at a profit is entitled to the business, and protected carriers should restrict themselves to operation in which they have a clear economic advantage.
BETHLEHEM STEEL COMPANY,
Detroit, Mich., September 9, 1948. The LEAKE STAMPING COMPANY,
1250 E. First Street, Monroe, Michigan. (Attention : Mr. James A. Leake.) GENTLEMEN: We have your letter of August 31, 1948, relative to having returned your order #9292 dated August 30, covering 75 tons of 7-gauge strip steel, and wish to confirm our conversation while in your office one day last week. We also regret the necessity of our having to return this order to you, but as explained in our visit, our obligations and commitments together with our limited sheet production have placed us in a position which makes it unable for us to accept any additional tonnage. As previously stated, we are mindful of your extreme need for sheets and we are anxious to do something for you, as soon as we can, but at the present time we cannot promise when that will be.
(In ink :) Cultivator Part.