Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-02-14
u. s. SEEKS TOBAR
Sd FOOD MERGER
Proposed $4,000, 900
Chain-Store Combine La4-
est Target of Injunction.
By the Associated Prs~

| By the Associated prssS
| NEW YORK, February 1s.-The
United States Government moved to-
day to prevent what it regards as an
| attempt to convert the chain-store
| system into linked letters for the re-
| straint of trade and commerce.
United States District Attorney
| Buckner filed an equity suit in Federal
| Court to enjoin the National Food
| Products Corporation from obtaining
| further stock in competing food cor
| porations. and to require the corpora
| ton to dispose Of its present holdings
| in such concerns.
| The suit today was the snag upon
which the third great proposed com
! bine in Americas $4,000 900, 900 food
| industry was caught. 1t followed
| within a few days a similar anti trust
| action against the proposed 81, 600. 00O,-
: 600 Ward Food Products Corporation
and the collapse OF negotiations for "A
| 100000, 600 combination of the
| Postum Cereal Co. and the California
| Packing Co, generally attributed 10
| fears of meeting Government disap-
prevail
Charges Lessening Competition.
| The district attorney charged that
the National Food Products Corpora
| ton, "A holding corporation recently
| formed. through acquisition Of ca pitai
| stock of other corporations which ope-
| rate more than Is 600 chain stores
! throughout Northwestern United
! States would lessen competition, re-
! strain trade. and create a monopoly
| of one or more lines of commerce.
I The total capital Of such companies
| is in excess of $50 ,o0O. 900.
| Unlike the proposed Ward combi-
/ nation. however, the national cor
! poration did not plan 10 take fun
control of its constituent companies.
| nor did II contemplate a merger of
| the properties In the official an
! nouncement of its formation. made
! mere on February >, il was explained
that bankers and prominent food
| merchants had organized the corpor-
alton along familiar lines Of public
! utlntN holding companies. and that
| its activities would he To purchase.
| sell. own and underwrite
| Five individuals. ali officers and
| directors OF the National Food Prod
| ucts Corporation. We're named with
| the corporation as defendants. They
| We're: H. &. Bohack president Of the
| Ii. {. Bohack Co. Inc: &. &. Bur
| dan. president of Burdan Brothers
/ l.. BENEDICT. vice president of the
! Worcester Salt Co: r +. Halses.
| vice president of Sheffield Farms.
| Inc. also a director of the National
! Dairy Products. and J. A. Macder-
! mott vice president Of the United
! States Dairy Products Corporation.
Original Capitalization 50 900
/ Mr.. Buckner cited that the original
| capitalization of the national cor
| poration was $1,000. and that the
I
porsted originally were: ITO buy and
sell food products" Later. the dis
| trict attorney complained. the cor
/ poration's capital was placed At
1000 geo shares each of class A and
| class b common stock, which. a L
| the price of an initial offering of
| shares. would be equivalent to s45.
! 600, 900. Simulta neouSly, the functions
! OF the corporation We're greatly en-
| large. 10 include the practices OF
which the district attorney COM
planned in his suit.
| Forty thousand units Of the class
"A" and class b" stock We're sold
| recently for a total of $500 900, pay
/ ments for which become due next
| Monday. MIR BuCkner said one
| object for pressing the suit al this
| time was 10 TEST the legality OF the
! alleged combination before the
! public had parted with its money.
! The complaint filed by the district
! attorney dealt AT length with the
! growth of chain stores systems, and
| charged that if these in turn. were
/ permitted by the Government to con-
soiidate through interlocking direc-
| torateS. IAN important voice in the
| mana cement of corporations engaged
| in interstate trade and commence in
! various parts of the United States. in
| the production. sale and distribution
| of foodstuffS would be Cenrerel in
| small group of persons.
! This. he charged. was in violation of
| the provisions of the Clayton act.
! Chain Stores Have Expanded.
Mr.. Buckner declared that prior 10
| 1908 groceries were universally sold
| throughout the country through indie
! pendent local retail stores. but that
| since then the chain store system had
expanded until 10000 of a total of
| 100000 retail grocery stores in the
| United States are chain stores. Of
! this number. he said, 5000 were op-
! Grated and controlled by corporations
| in which the National Food Products
Corporation had acquired stock
Executives of the national corpora
! ton declined to comment on the suit.
| but said they would issue statement
explaining their position next Munday
, Substantial interests have been ac-
| CURED In the following comp MES.
III. {. Buhack To-, operating about
| 800 retail grocery stores in the New
| YORK metropolitan district.
II james Butler Co. operating 800 re-
ftaH grocery stores in New York. New
Jersey and ConneCsicut.
United States Stores CORPORATION.
| operating 1850 retail grocery ana
| meat stores in New York, New ,Ier.
| sey, OHIO, India ma. Michigan. Penn
! sylvania and the New England
! States.
David Fender Grocery co. operat
| ing PAS grocery stores in North Caro-
| lima and Virginia.
| Firs; National Stores. Inc, operat
| ing 1.640 chain grocery stores in New
| England.
Great Atlantic and Pacific Tea Co.
| operating $4,000 retail grocery stores
| throughout the United States
| In addition, stoCkholdings were &C
| quired in the United States Dairy
| Products Corporation, Abhott's Alder
ney Diaries. Inc; the Borden Co. the
! Reid Ice Cream Co and the National
| Dairy Products Corporation.