New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-08-25
Judge Hazel Holds East
man Company Violates
the Sherman Law.
MUST ADVOCATE
TRADE RESTRAINT
Jurist Finds Government Showed
Unfair and Illegal Suppress
sion of Competition.

Buffalo, Aug. 24.-The Eastman no.
Oak Company. of Rochester. is a mo-
nopoly in restraint of trade in VIOLA
ton of the Sherman antitrust law. ac-
cording to a decision handed down here
late to-day by Judge John R. Hazel. OF
the United States District Court. The
decision grants the defendant company
an opportunity to present plan 1or
he sbrogation of the illegal monopoly
on the first day Of the November term
Judge Hazel in his opinion stated
that, while it appeared that no IRENE
diable hardship would result from a
separation Of the present business into
two or more separate companies. 1t was
not at this time intended to indicate
either a dissolution. division or reor-
ganization.
1t no doubt is possible, he said, that
an adequate measure of relief might
result from enjoining the unfair prac-
tees of the terms of sale agreements,
and from a separation Of the business;
but the defendants should have an OPP
portunity to present to the court on
the first day of the 1915 November
term a plan for the abrogation OF the
illegal monopoly unduly and unrea-
sonably restraining interstate trade
and commerce; or, if an appeal from
this interlocutory decree is taken to
the Supreme Court, ard this decision is
affirmed, such plan is to be presented
within sixty days from the filing OF the
mandate.
Insisted on Price Fixing.
The Federal suit against the East
man companies was filed in the United
States District Court in Buffalo on
June g. 1918, and for a year attempts
were made to bring about settlement,
the company agreeing TO make changes
in its selling policy and other altera-
tons in its business methods asked by
the government, except its practice OF
fixing retail prices on its goods, which
, il contended was necessary Tor the pro-
lection of it's customers against price
cutting by retailers.
ACQUIRED Twenty Concerns.
The bill alleged substantially that
from 1902 to 1906 the Eastman Com
panv of New York intentionally monop-
olized the business of manufacturing
and selling cameras, plates, photo,
graphic paper and film in the united
States by acquiring control Oh twenty
competing concerns, which were AFTER
ward dissolved, the plants dismantled
and their business removed to Roches-
ter
That the Eastman Kodak Company OF
New Jersey acquired many stock houses
engaged in different states in selling
Photographic supplies manufactured by
the defendants and their competitors
That the defendants with the inten-
ton of monopolizing the importation
acquired the exclusive right to sell IN
the United States and Canada raw
paper stock from European paper mills
"a necessity in the manufacture OF
Photographic papers.
Competition Sfined.
That from 1899 to 1908 all Eastman
products were sold by dealers under
restrictions and with discounts which
stifed competition. In 1908 these dis
counts were discontinued. and subse-
ouently so-called terms of sale were
adopted limiting dealers TO the hand
ling exclusively of Eastman products
under penalty of revocation of the
right TO deal in any of the Eastman
commodities.
BY the acquisition of properties and
enforcement of the terms of sale. it
was alleged, the defendants acquired
! the largest percentage of the trade. I'M
| lawfully restrained such trade and OBJ
tanned an illegal monopoly.
The defendants in their answer de-
MED restraining trade or competition or
engaging in a monopoly, and claimed
their status was a result of the crea-
( ton and development within their
plants of products of a superior quality
and Of the manufacture of a camera in
! which they were the conceded pioneers.
Built Perpetual Barriers.
The opinion reviewed in detail the
ACQUISITION of the control of raw paper
and of competing companies, and stated
! that it was difficult to avoid the con-
| clusion that these acts were for the
purpose IF suppressing competition
/ and in furtherance of an intention to
/ form a monopoly. In substantiation Of
| this it was pointed out that in nearly
every instance the conveyances con-
| tanned restrictive covenants prohibit
J ing the officers of the acquired con-
Germs from re-entering the business for
periods ranging from five to twenty
I five years, thus serving, as said in the
! Tobacco cause, "as perpetual barriers
/ to the entry of others"
Judge Hazel dismissed the govern
ment's claim that contracts for the
manufacture of motion picture film en-
tered into between the defendants and
the Motion Picture Patents Company
we're violations of the statute.
Enormous Gains Shown.
The court quoted the great gains and
profits of the company for the year
! 1912, which amounted to s15,633, 551.33,
/ or about III per cent on total sales of
! S24. 763, 407.65, as showing the large
| disproportion between the cost Of man
ufacture and the price paid by the con-
sumer. II is undisputed, the court held,
| that the Eastman company controlled
! approximately between rs per cent and
so per cent of the entire trade, and
had accordingly obtained a monopoly.
"The burden rested upon the defend
ants TO prove that this was accom-
plished by lawful methods" Judge
Hazel said, "and after careful consid-
Grafton | have concluded that such
| burden was not borne, but that, on the
contrary, the government has show
affirmatively that interstate trade and
commerce have been unjustly and b.
normally restrained by the defendants
By the formation of a monopoly N
duced by wrongful contracts with re
| gard 10 raw paper stock, preventing the