Mathieson Alkali Works, Inc.

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In THe MaArrer OF MATHIESON ALKALI WORKS, INC., ET AL.

COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 3317. Complaint, Jan. 31, 1938—Dectsion, Dec. 16, 1938 Where nine corporations engaged in the manufacture of liquid chlorine for commercial purposes, and in the sale thereof directly and through sales agents to purchasers, including towns, cities, and other municipalities, State governments and divisions thereof, Federal Government and divisions thereof, and State and Federal institutions, and representing, in their output, substantially all the liquid chlorine made for commercial and industrial purposes in the United States and sold therein since 1930, and since said year only regular source of supply for purchasers of said product, and prior to 1931, and still, but for acts below set forth, in competition as to price with one another in sale of said product among the various States, Territories and District of Columbia— Entered into, carried out, and continued to carry out agreement, combination, understanding, and conspiracy among themselves to fix and maintain enhanced uniform prices to be exacted by them from purchasers of such liquid chlorine in commerce among the various States and in said District; and in pursuance of said agreement, etc., and agreements made so to do— 1. Fixed and maintained uniform prices for liquid chlorine sold by them and by each of them; and 2. Divided United States into zones for which they fixed and maintained enhanced uniform prices to be exacted from their purchasers of said product; With a dangerous tendency to, and with result of, actually hindering and preventing price competition in sale thereof in commerce as aforesaid, increasing prices paid by purchasers thereof, creating in themselves monopoly in sale of said product and in interstate commerce, and of unreasonably restraining such commerce; all to the prejudice of competitors and to the injury of the public:

Held, That such acts and practices constituted unfair methods of competition in commerce within intent and meaning of Federal Trade Commission Act. Before Mr. John J. Keenan, trial examiner.

Mr. Edward L. Smith for the Commission.

Chadbourne, Wallace, Parke & Whiteside, of New York City, for Mathieson Alkali Works, Inc.

Root, Clark, Buckner & Ballantine, of New York City, for The Electro Bleaching Gas Co.

Miller, Owen, Otis & Bailly, of New York City, for Solvay Sales Corporation.

Sage, Gray, Todd & Sims, of New York City, for The Hooker Electrochemical Co.

Reed, Smith, Shaw & McClay, of Pittsburgh, Pa., for The Diamond ATkali Co.

Complaint 2 De baes Avis & Angel and Mr. A. S. age ee Jr., of Charleston, W. Va., for The Belle Alkali Co.

Mr. William W. Schneider and Mr. Charles E. Caspari, Jr., of St. Louis, Mo., for The Monsanto Chemical Co. Montgomery & McCracken, of Philadelphia, Pa., for Pennsylvania Salt Manufacturing Co.

Mr. Sidney G. DeKay and Wright, Gordon, Zachry & Parlin, of New York City, for The Columbia Alkali Corporation. 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 Mathieson Alkali Works, Inc., The Electro Bleaching Gas Co., Solvay Sales Corporation, The Hooker Electrochemical Co., The Diamond Alkali Co., The Belle Alkali Co., The Monsanto Chemical Co., Pennsylvania Salt Manufacturing Co., and The Columbia Alkali Corporation, hereinafter referred to as respondents, have been and now are using unfair methods of competition in commerce as “commerce” is defined in said act, and it appearing to said Commission that a proceeding by it in Feet thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as rolleyes? Paracrary 1. All of the respondents are corporations fopand existing, and doing business under and by virtue of the laws of the States hereinafter mentioned and with their principal places of business in the cities hereinafter mentioned, to wit: Name of respondent and State of incorporation Principal place of business: Mathieson Alkali Works, Inc., Virginia-—____________-— New York City, N. Y. The Hlectro Bleaching Gas Co., New York______________ New York City, N. Y. Solvay Sales Corporation, New York._-____-___________ New York City, N. Y. The Hooker Electrochemical Co., New York---------___ New York City, N. Y. The Diamond Alkali Co., Delawarec._2.4 ee Pittsburgh, Pa. The Belle Alkali,Co., West Virginia.__.__.___________.___ Belle, W. Va. The Monsanto Chemical Co., Missouri_._.-.--__________ St. Louis, Mo. Pennsylvania Salt Manufacturing Co., Pennsylvania_____ Philadelphia, Pa. The Columbia Alkali Corporation, Ohio________________. New York City, N. Y. Par. 2. Said respondents are now and since their organizations have been engaged in the manufacture, at their respective places: of business, of liquid chlorine for bommercn| purposes and in the sale thereof ditteny and through sales agents to the purchasers thereof, an important class of such purchasers being towns, cities, and bttliek municipalities, State governments and divisions ehereok! the Federal MATHIESON ALKALI WORKS, ING., ET AL. 1415 14138 Complaint Government and divisions thereof, and State and Federal institutions. In the course and conduct of their businesses all of the said respondents for more than 5 years last past have caused and still cause such liquid chlorine when sold by them, to be transported in interstate commerce from their respective places of business to, into, and through various States of the United States other than the States in which they respectively have their factories and places of business, to the purchasers in such other States to whom said liquid chlorine is and has been sold. The amount of liquid chlorine manufactured for commercial and industrial purposes and sold by the respondents directly and through sales agents constitutes and at all times since 1930 has constituted substantially all the liquid chlorine manufactured for commercial and industrial purposes in the United States and sold therein. Purchasers of liquid chlorine have no regular source of supply, excepting from the respondents, and since 1930 have had no regular source of supply of liquid chlorine excepting from the respondents.

The respondents were prior to 1931 in competition as to price with one another in the sale of liquid chlorine between and among the various States of the United States, the Territories thereof, and the District of Columbia and but for the combination, agreement, understanding, and conspiracy hereinafter described, said respondents would have been at all times since 1931 and would now be in such competition with one another.

Par. 3. In 1931 said respondents for the purpose of eliminating price competition among themselves entered into, have since carried out, and are still carrying out an agreement, combination, understanding, and conspiracy among themselves to fix and maintain, and by which they have fixed and maintained enhanced uniform prices to be and which have been and are still being exacted by them from their purchasers of liquid chlorine in commerce between and among the various States of the United States and in the District of Columbia. Pursuant to and for the purpose of carrying out the aforesaid agreement, combination, understanding, and conspiracy, the said respondents have, among other things, done the following: (a) By agreement among themselves have fixed and maintained and still fix and maintain uniform prices for liquid chlorine sold by them and by each of them;

(d) Agreed to divide, and pursuant to such agreement, have divided the United States into zones, for which zones the respondents have by agreement fixed and maintained and still fix and maintain enhanced uniform prices exacted by them from their purchasers of liquid chlorine.

Findings 27 F. TC. Par. 4, The acts and practices of the respondents as herein alleged are all to the prejudice of competitors of respondents, have a dangerous tendency and have actually hindered and: prevented price competition in the sale between and among the various States of the United States, the Territories thereof, and in the District of Columbia of liquid chlorine; have increased the prices of liquid chlorine paid by purchasers thereof, an important class of such purchasers being towns, cities, and other municipalities, State governments and divisions thereof, the Federal Government and divisions thereof, and State and Federal institutions, and consequently by the public; have created in the respondents a monopoly in the sale in interstate commerce of liquid chlorine; have unreasonably restrained interstate commerce in liquid chlorine 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.

Report, Frnpines As TO THE Facts, AND OrpDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission, on January 31, 1938, issued, and served its complaint in this proceeding upon respondents, Mathieson Alkali Works, Inc., The Electro Bleaching Gas Co., Solvay Sales Corporation, The Hooker Electrochemical Co., The Diamond Alkali Co., The Belle Alkali Co., The Monsanto Chemical Co., Pennsylvania Salt Manufacturing Co., and The Columbia Alkali Corporation, charging them with the use of unfair methods of competition in commerce in violation of the provisions of said act. After the issuance of said complaint and the filing of respondents’ answers, the Commission, by order entered herein, granted respondents’ motions for permission to withdraw said answers and to substitute therefor answers admitting all of the material allegations of fact set forth in said complaint and waiving all intervening procedure and further hearing as to said facts, which substitute answers were duly filed in the office of the Commission. Thereafter, this proceeding regularly came on for final hearing before the Commission on the said complaint and substitute answers, and the Commission, having duly considered the matter and being now fully advised in the premises, finds that this proceeding is in the interest of the public and makes this its findings as to the facts and its conclusions drawn therefrom: MATHIESON ALKALI WORKS, INC., ET AL. 1417 1413 Findings FINDINGS AS TO THE FACTS ParacraPH 1. Respondent, Mathieson Alkali Works, Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Virginia, with its principal place of business in New York, N. Y.

Respondent The Electro Bleaching Gas Co. is a corporation organized, existing, and doing business under and by virtue of the laws of the State of New York, with its principal place of business in New York, N. Y.

Respondent Solvay Sales Corporation is a corporation organized, existing, and doing business under and by virtue of the laws of the State of New York, with its principal place of business in New York, Needs Respondent The Hooker Electrochemical Co. is a corporation organized, existing, and doing business under and by virtue of the laws of the State of New York, with its principal place of business in New MVOrkNe-Y;

Respondent The Diamond Alkali Co. is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Delaware, with its principal place of business in Pittsburgh, Pa.

Respondent The Belle Alkali Co. is a corporation organized, existing, and doing business under and by virtue of the laws of the State of West Virginia, with its principal place of business in Belle, W. Va. Respondent The Monsanto Chemical Co. is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Missouri, with its principal place of business in St. Louis, Mo.

Respondent Pennsylvania Salt Manufacturing Co. is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Pennsylvania, with its principal place of business in Philadelphia, Pa.

Respondent The Columbia Alkali Corporation is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Ohio, with its principal place of business in New York—-N._Y.

Par. 2. Said respondents are now and since their organizations have been engaged in the manufacture, at their respective places of business, of liquid chlorine for commercial purposes and in the sale thereof directly and through sales agents to the purchasers thereof, an important class of such purchasers being towns, cities, and other municipalities, State governments and divisions thereof, the Federal Government and divisions thereof, and State and Federal institu- 1418 FEDERAL’ TRADE COMMISSION DECISIONS Conclusion 27 B Bie: tions. In the course and conduct of their businesses, all of the said respondents for more than 5 years last past have caused and still cause such liquid chlorine, when sold by them, to be transported in interstate commerce from helt respective Dias of business to, into and through various States of the United States other ae the States in which they respectively have their factories and places of business, to the purchasers in such other States to whom said liquid chlorine is and has been sold. The amount of liquid chlorine manufactured for commercial and industrial purposes and sold by the respondents directly and through sales agents constitutes and at all times since 1930 has constituted substantially all the liquid chlorine manufactured for commercial and industrial purposes in the United States and sold therein. Purchasers of liquid chlorine have had no regular source of supply except from the respondents since 1930. The respondents were, prior to 1931, in competition as to price with one another in the sale of liquid chlorine between and among the various States of the United States, the Territories thereof, and the District of Columbia, and but for the combination, agreement, understanding, and conspiracy hereinafter described, said respondents would have been at all times since 1931, and would now be, in such competition with one another.

Par. 3. In 1931, said respondents, for the purpose of eliminating price competition among themselves, entered into, have since carried out, and are still carrying out an agreement, combination, understanding, and conspiracy among themselves to fix and maintain, and by which they have fixed and maintained enhanced uniform prices to be, and which have been and are still being, exacted by them from their purchasers of liquid chlorine in commerce between and among the various States of the United States and in the District of Columbia. Pursuant to and for the purpose of carrying out the aforesaid agreement, combination, understanding, and conspiracy, the said respondents have, among other things, done the following: (a) By agreement among themselves have fixed and maintained, and still fix and maintain, unifor m prices for liquid chlorine sold by them and by each of canis (6) Agreed to divide, and pursuant to such agreement have divided, the United States into zones, for which zones the respondents have by agreement fixed and maintained, and still fix and maintain, enhanced uniform prices exacted by them from their purchasers of liquid chlorine.

CONCLUSION The acts and practices of the respondents, as herein described, are all to the prejudice of competitors of the respondents and to the MATHIESON ALKALI WORKS, INC., ET AL. 1419 1413 Order injury of the public, have a dangerous tendency to and have actually hindered and prevented price competition in the sale of liquid chlorine in commerce between and among the various States of the United States, the territories thereof, and in the District of Columbia; have increased the prices paid by purchasers for liquid chlorine; have created in the respondents a monopoly in the sale of liquid chlorine in interstate commerce as defined in the Federal Trade Commission Act; have unreasonably restrained such commerce and constitute unfair methods of competition in commerce within the intent and meaning of the Federal Trade Commission Act. ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission and the answers of respondents, in which answers respondents admit all the material allegations of fact set forth in said complaint and state that they waive all intervening procedure and further hearing as to said facts, and the Commission having made its findings as to the facts and conclusion that said respondents have violated the provisions of the Federal Trade Commission Act.

It is ordered, That the respondents, Mathieson Alkali Works, Inc., The Electro Bleaching Gas Co., Solvay Sales Corporation, The Hooker Electrochemical Co., The Diamond Alkali Co., The Belle Alkali Co., The Monsanto Chemical Co., Pennsylvania Salt Manufacturing Co., and The Columbia Alkali Corporation, their respective officers, agents, servants, and employees, in connection with the sale and the offering for sale of liquid chlorine in commerce between and among the various States of the United States and the District of Columbia, do forthwith cease and desist from entering into any understanding, agreement, combination, and conspiracy between and among any two or more of the said respondents and from continuing any agreement, combination, understanding, and conspiracy heretofore entered into among themselves, to fix and maintain or for the purpose of fixing and maintaining uniform prices or enhanced uniform prices, or to divide the United States into zones for the sale of said product at uniform prices, or at enhanced uniform prices; provided that nothing herein contained shall prohibit the exercise by the respondents of their lawful rights under the patent laws of the United States.

It is further ordered, That the respondents shall, within 30 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 shall have complied with this order. Syllabus 27 F.C