(7) Refusing to sell any buyer who so elects at a price calculated f, o, b. point or place from which the goods purchased are actually shipped;

(8) Requiring that customers purchase only on a delivered price basis, whether in the form of a single delivered price throughout the United States or throughout each of any number of price zones;

(9) Making any payment or allowance to buyers for the return of reels on which cable or wire is wound for delivery, where such payment or allowance is other than the actual cost of return freight to place of shipment and where, as a necessary incident to paying or allowing other than the actual freight, identity of delivered prices is preserved and maintained among the respective respondent manufacturers.

(10) Agreeing or attempting to agree with any competing manufacturer when both are selling goods as licensees under the same patent, for the purpose and with the effect of fixing a price or prices at which they shall each sell the article covered by their licenses, and for the purpose or with the effect of obtaining from their licensor a requirement that the price so arrived at shall be adhered to under the terms of their respective license agreements; provided that this paragraph shall not abridge any legal rights of a licensor under a patent or patent license agreement:

PROVIDED, HOWEVER, that the prohibitions of this order shall not apply to any lawful action taken under patents or license agreements relating thereto.

IT IS FURTHER ORDERED that the above respondents shall, within sixty (60) days after service upon them of this order, file with the Commission a report in writing setting forth in detail the manner and form in which they and each of them have complied with this order.

By the Commission.

[SEAL]

OTIS B. JOHNSON, Secretary.

UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF NEW YORK

COMPLAINT

Civil Action No. 33-128

United States of America, plaintiff, v. American Steel and Wire Company of New Jersey, a corporation; Anaconda Wire and Cable Company, a corporation; General Cable Corporation; General Electric Company, a corporation; Phelps-Dodge Copper Products Corporation; Habirshaw Cable and Wire Corporation; and The Okonite Company, a corporation, defendants

The United States of America, by John F. X. McGohey, United States Attorney for the Southern District of New York, acting under the direction of the Attorney General of the United States, brings this action to recover civil penalties provided by section 5 (1) of the Federal Trade Commission Act, as amended (Title 15, Section 45, United States Code), and for its complaint alleges upon information and belief:

FOR A FIRST CAUSE OF ACTION

1. That the defendant American Steel and Wire Company of New Jersey (sometimes hereinafter referred to as American) at all times hereinafter mentioned was and now is a corporation organized and existing under the laws of the State of New Jersey, doing business in each of several States, including the State of New York, and maintaining an office for the transaction of business within the City, State and Southern District of New York and within the jurisdiction of this Court.

2. That the defendant Anaconda Wire and Cable Company (sometimes hereinafter referred to as Anaconda) at all times hereinafter mentioned was and now is a corporation organized and existing under the laws of the State of Delaware with its principal office in the City, State and Southern District of New York and within the jurisdiction of this Court.

3. That the defendant General Cable Corporation (sometimes hereinafter re ferred to as General Cable) at all times hereinafter mentioned was and now is a corporation organized and existing under the laws of the State of New Jersey, with its principal office in the City, State and Southern District of New York and within the jurisdiction of this Court.

4. That the defendant General Electric Company (sometimes hereinafter referred to as General Electric) at all times hereinafter mentioned was and now is a corporation organized and existing under the laws of the State of New York, maintaining an office for the transaction of business within the City, State and Southern District of New York and within the jurisdiction of this Court. 5. That the defendant Phelps-Dodge Copper Products Corporation (sometimes hereinafter referred to as Phelps-Dodge) at all times hereinafter mentioned was and now is a corporation organized and existing under the laws of the State of Delaware, with its principal office in the City, State and Southern District of New York and within the jurisdiction of this Court. In the amended complaint issued by the Federal Trade Commission on the 16th day of November 1935 in its proceeding antecedent to this action, said defendant was inadvertently described as a New York corporation; but, on October 30, 1936, this defendant filed a substituted answer to the aforesaid amended complaint, in which it admitted that it was one of the respondents named in said amended complaint. The only respondent named therein as Phelps-Dodge Copper Products Corporation was the defendant as aforesaid. The defendant Habirshaw Cable and Wire Corporation (hereinafter sometimes referred to as Habirshaw) at all times hereinafter mentioned was a corporation organized and existing under the laws of the State of New York, with its principal office in the City, State and Southern District of New York and within the jurisdiction of this Court, is a subsidiary of defendant Phelps-Dodge Copper Products Corporation, and as such is operated, not only under the ownership, but also under the active control and direction of the latter. In or about 1941, the defendant Phelps-Dodge Copper Products Corporation directed that the defendant Habirshaw Cable and Wire Corporation continue its operations as they had been carried on since about 1932, but under the designation of and as the Habirshaw Cable and Wire Division of defendant Phelps-Dodge Copper Products Corporation. That direction has since in or about 1941 been followed by defendant Habirshaw.

6. That the defendant The Okonite Company (sometimes hereinafter referred to as Okonite) at all times hereinafter mentioned was and now is a corporation organized and existing under the laws of the State of New Jersey, maintaining an office for the transaction of business within the City, State, and Southern District of New York and within the jurisdiction of this Court.

7. That each of the defendants for several years prior to May 20, 1938, and down to the present time has been engaged in the business of selling and offering for sale in interstate commerce impregnated paper cable, varnished cambric cable, rubber power cable, parkway cable, and other electric wire and cable for the transmission of electric current; that such interstate commerce involves the sale and shipment of said products into the State of New York, including the Southern District thereof, from other States and from the State of New York. including the Southern District thereof, into other States; and that many of the violations of the cease and desist order of the Federal Trade Commission, hereinafter alleged, have taken place within said State and District.

8. That the Federal Trade Commission on Sepembter 26, 1935, issued and served upon each of the defendants herein its original complaint, and on November 16, 1935, issued and served upon each of the defendants herein its amended complaint, in its antecedent proceeding against these defendants and others. in which each of the defendants herein was charged with violating the Federal Trade Commission Act (Title 15, Section 45, United States Code.) A copy of the amended complaint is said antecedent proceeding by the Federal Trade Commission, duly certified according to law, is attached hereto as "Exhibit A" ard made a part hereof.

9. That defendant American Steel and Wire Company of New Jersey on October 31, 1936, defendant Anaconda Wire and Cable Company on November 2, 1936, defendant General Cable Corporation on November 5, 1936, defendant General Electric Company on November 2, 1936, defendants Phelps-Dodge Copper Products Corporation and Habirshaw Cable and Wire Corporation on October 30, 1936, and defendant The Okonite Company on October 7, 1936, appeared before and filed with the Federal Trade Commission their respective answers to said amended complaint, admitting all of the material allegations of said complaint to be true. Copies of said answers, duly certified according to law, are attached hereto as "Exhibit B" and made a part hereof.

10. That on December 29, 1936, the Federal Trade Commission made a report in writing in said antecedent proceeding, stating its findings as to the facts in accordance with the material allegations of the complaint which had been ad

mitted to be true by the speerze jefendants herein. Said report of findings as to the facts, duly certified recording ‘0 av, is attached hereto as 'Exhibit C and a portion of same is ziņied into this complaint as follows:

FINDINGS AS TO THE FACTS AND CONCLUSION

Pursuant to the prongens if an At of Congress approved September 26, 1914. entitled “An A* ha create a Federal Trade Commission, to dedne its powers and duries, and be orber pazeses," the Federal Trade Commission, on September 8. 1997, bed and served its original complaint in this proceeding and on November 16. 1:35. issued and served its amended cour plaint in this priesling tpen the parties named in the above caption, It included said parties 1s respondents in this proceeding, both separately and as representatives of all the members of respondent association, charging them with the use of mfair methods of competition in violation of the provis sions of said Aer. After the issuance and service of sæ'd amended complaint respondents filed their respective answers thereto making general denial of the s ́stantial allegations of said commlaint. Subsequen"'y all the respondents except Bishop Wire and Cable Corporation petitioned the Federal Trade Commission for permission to withdraw said answers and to fe their substituted answers to the amended complaint, consenting therein that for the purposes of this preseding all the material allegations of said complaint might be deemed to he admitted in so far as they relate to the business of selling power cable and "Safecote" rubber covered beading wire. Pursuant to permission granted by the Commission said original answers were withe drawn by said respondents and said substituted answers were fled in lieu thereof. Said respondents also consented therein that the Commission might proceed to make its findings of facts without further proceedings and that an order to cease and des ́st 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 fact and law drawn therefrom.

FINDINGS AS TO THE FACTS

Paragraph One: Respondent National Electrical Manufacturers Associa tion 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 associa tion consists of several hundred corporations, individuals, firms, and partnerships.

At the time the amended complaint was issued and served the following corporate respondents were among the members of respondent association: American Electrical Works, Philadelphia, Pa. (a Rhode Island corpora tion), succeeded by Kennecott Wire and Cable Company through change of name; 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, NY (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); Kennecott Wire and Cable Company, Philadelphia, Pa. (a Rhode Island corporation), suecessor 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. Roebling's Sons Company, Trenton, N. J. (n New Jersey corpora tion); Simplex Wire and Cable Company, Boston, Mass, (A Massachusetts corporation); Triangle Conduit and Cable Company, Brooklyn, N. Y. Ca New York corporation); United States Rubber Products, Inc., New York, N. Y. (a New Jersey corporation).

The said respondent members, through the respondent association, have promoted, established, and utilized 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. 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, 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. Impregnated paper cable is used for transmitting current from the 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 distributed through what is known as building wire.

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.

The respondent 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 requirements 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 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 the markets in which unorganized consumers must buy such goods.

Paragraph Three: The respondent manufacturers specifically named in Paragraph One, 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 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) Said 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 according to iden tical delivered prices, terms, and sales conditions determined by the joint or cooperative action of the members of the respective groups, sections or subdivisions of respondent associations 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 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 eirenlated imong the other respondent ma ufgerines of si sont Iodines expeting empiex and lealed "rice sts, offering Pri assur inz suen other respondent manufacturers, “Deiz zmpetto “ha“ latter wond nor piore and ses at less than the list prices of the respect Vy compilers, then sald empilers would na ncin the prices of the wxDAOVA lists and wond ameta 47 verf Deir sad competitors of all romposed changes in price or in die metodis of uleulang sine. Acting via d offers and asslices respondent manicienrers of sad gemirodex XX tematically prepared, drenatal, ex thanged, adepted, and used, the "Lice lists so compled as the amount to be proted to and set ned in thec customers, für the purpose and with the effect of avoiding and suppressing price competition among all of respondent maniacturers of said one modities.

b. In the compilation, abiprion, and use of said price "sts, it was understood and agved among sabd respondent mamfemmers tha 90 268 tomer should be allowed to pambase except on a del vered price bas suant to sneh understanding and agreement, said price (1sts embeded and contained only delivered prices and the firza by which such prices wi to be calen ated. As to some prodmers the price lists specfed a s delivered price to be paid by all customers throughout the Und S and including Panama Canal Zone, Porto Rico. Hawa an Ian's and Alaska. As to other products the price lists specified & engle dei ve ed price to be paid by all enstomers throughent and within each of a vimber of price zones, each composed of a number of States of the United Surv or parts of such States. The purpose of said delivered price nelay was to prevent respondent manufacturers from allowing diferences » te wor imity of any given customer to their respective plants, to create get ference in the amount to be paid by him delivered from any sea te oř supply.

(e) For the purpose and with the effect of further suppressing price cons petition among themselves, respondent manufacturers of said commodi, N supplemented said uniform delivered price lists by imposing a vvisorm eba' ge for the large wooden reels on which cable is wound for delivery and a un form allowance for the return of such reels. Said price lists mcluded a uniform charge for the return freight on such reels, which ebarzo, in solut cases, was more and in other cases less than the actual cost of such retura 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 com petition 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, 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 with a similar 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 polley respondent manufacturers habitually and systematically discriminated in price among their various customers after making due allowance for the cost of transportation, 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 pilce policy, customers located at or near the place of manufacture and shipment were deprived of the advantage of such location and were required to con