Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1911-09-19
United States Prosecutors
Secure Bills Against
Officers.
CORNER ON BUSINESS
Alleged That Royalty Is Exact
ed on Every Pair of Foot
wear Manufactured.

Boston, Mass, Sept 13.-Indict-
ments were returned today by the fed
eral grand jury against the United
Shoe Machinery company. II is charg-
ed with conducting its business in re-
straint of trade.
TheindividuaIs indicted are Fire Presi-
dent Sidney ". WindsIow; Edward 2.
Hurd, George w. Brown, James J.
Storrow, William Barbour and Elmer
p. Howe. directors. The indictments
charge the defendants with working
through the insTumentality Of the
United Shoe Machinery company in
way to make them as individuals Grim
inally liable under the Sherman act.
BRIEF COURT PROCEEDINGS.
The court proceedings occupied less
than five minutes, for the grand jury
merely handed in the formal docu-
ments in the case and was then eX-
cused. Special Assistant Attorney
Gregg made a statement summarizing
the documents. This shows the organ
ization of the merger Feb. :, 1898, the
= =oppressiyeness OF machinery leases eN-
acted from shoe manufacturers, and
the driving of many small concerns out
of business.
wINDsLOw THE FOUNDER.
The United Shoe Machinery com
pany came into being in 1889 It
vas founded by Sydney y. WindslOw.
It's present head, who learned shoe
making in a small factory in Salem,
Sc far hn rn
secure advantages of combining al
lied interests formed a corporation
embracing the three leading compan-
les then making shoe machinery
Goodyear Sewing Machine company,
consolidated, and Mckay Lasting
company and Mckay Shoe Machin-
cry company-were consolidated.
The company was reOrganlzed in
1905 and subsequently auxiliary
companies sprang up in Canada,
Great Britain. France and Germany.
That same year the manufacturing of
all its shoe making machinery was
concentrated in one large factory at
Beverly. Mass The United States
Shoe Machinery company now en-
ploys 1. 900 hands. who turn out 90
900 shoe machines yearly.
ROYALTY on EVERY SHOE.
The royalty system, by which the
corporation disposes of its machines,
allows a shoe manufacturer to lease
machines, paying rentals in royalties
on every shoe made. A manufactur-
er may buy machinery If he gets it
from the United Shoe Machinery
company. providing he buys his
findings as wire nails and
eyelets-frOm the company.
II is claimed that the royalty paid
the United company is about 2-3
cents per pair of shoes.
Last year the company brought
suit against Thomas c. Plant, a Bos-
ton shoe manufacturer. charging pat
ent infringements. Plant sold ont
his shoe machinery plant and patent
rights TO the United company after
4 bitter fight.
\ few months later an independ-
mt company-the Bresnahan Shoe
Machinery company of Lynn. Mass.
was also purchased by the United
company.
An UNEXPECTED PROBE.
The next important happening in
the life Of the United Shoe Nachin-
cry comrany was the unexpected gov
ernment probe. The special grand
jury was called Aug. l. Government
agents stated before serving subpoe-
mas that the question of leases would
be n vital question for the grand jury
20 consider. The jury made an eX-
tensiye investigation, sitting four
and five days week during the en-
tire month Of August.
Announcement of the climax in the
governments inquiries was Coincl-
dent with a proposal for state in
yestigatiOn by Governor Eugene y
Foss, a democrat, who IN message
10 the legislature. which was then in
session. pointed out the need OF a
statute 70 reach the alleged monop-
oily. The legislative committee on
rules said that an anti-monopOly bill
already enacted covered the situa-
tion.