Evening star., 1938-11-07
Antitrust Charges
Against Chrys|er and
Ford Dropped
u. S. Will Prosecute
General Motors Case
Vigorously
BACKGROUND

Governments first attempt TO
indict big three" of motor 1uorld,
Ford, Chrysler and General Mo-
tors, failed last December when
Federal Judge A. F. Geiger at
Milwaukee dismissed grand jury
because OF "impropriety' of Fed
erdl negotiations for consent de-
creeS 1Ohile jury 1raS sitting. At
torney General Cummings, de-
nouncing judges action, trans
terred case to South Bend, Uhere
indictments naming the motor
firms and so officials ,Cere re-
turned last May, charging anti
trust violations.
The Department of Justice today
dropped criminal proceedings under
the antitrust laws against the Ford
and Chrysler motor companies with
the announcement that both corpo-
ratlons have entered into consent
DEGREES regarding automobile financ-
ing. but the department wilk pro-
ceed vigorously" to prosecute the
General Motors Corp.
Failure of General Motors to pro-
pose an acceptable plan" for a
consent decree was given by Assist
ant Attorney General Thurman
Arnold as the reason for pressing
the Sherman Act indictments against
that corporation. All three COM
panles and their automobile finance
affiliates were indicted by Federal
grand jury at South Bend. Ind, for
restraining competition in the auto
mobile finance field.
The department announcement
signed by Mr. Arnold and approved
by Attorney General Cummings. ex-
planned that acceptance of the
consent DEGREES by Ford and Chrvs-
Ter involves no admission of guilt
The department, it was stated. be
lleves these defendants to be guilty.
OF the antitrust law violations
charged In the indictments. but it
has not heard the defense and
therefore the DEGREES cannot be
regarded as an adjudication of guilt.
Aids Voluntary Cooperation.
The voluntary cooperation of
business in achieving the purpose
OF the Sherman Act must not be
refused" the department said. The
test OF whether a nolle PROSE- will
be recommended on the basis of a
consent decree is whether that
decree accomplishes more in effec-
tuatlng the purpose of the act than
could be obtained through the Grim
inal court
Inc Government had charged a
conspiracy to compel automobile
dealers. by pressure and threats, to
nnance cars through the particular
hnance company with which the
manufacturer of the car was affil-
lated. 1t was alleged that three
1ourths of al 1.-The automobile financ-
ing IN this country was handled bv
afflllates of the three large motor
corporations named in the indict-
ments. Competition of some 375
independent finance companies was
hlndered, it was asserted.
The DEGREES volunteered by Ford
and Chrysler, it was pointed out.
eliminated "all of the coercive prac-
tlces' complained of and obligate
the two companies under court or
der to afford equal opportunity to all
competitors and to refrain from
"eXorbitant rates and harsh collec-
ton Methods
Bans Five Practices.
The order will prevent these spe-
clfic practices: l, threatened cam
collation. OF the franchises of dealers
who DO not favor finance affiliates
OF the motor corporations; 2, issu-
ance OF licenses to competing dealers
with view to promoting these affili-
ates; 3, compulsion on non-co-
operative dealers to take unneeded
cars or extra parts; 4, forcing deal
ers to adopt accounting systems
which make it difficult for them to
deal with independent finance COM
panies, and, S, harassments such as
expediting shipments to favored
dealers"
The consenting corporations pro-
poSed TWO voluntary restrictions re-
garding collection practices and ad-
vertising of finance systems.
The decree will protect low-in-
come buyers from undue hardship"
after they have been induced by
statesmen to buy beyond their means.
it was stated. Wages of those who
purchase cars in the ess-than-$ 900
class canont be assigned nor gar
nisheed, higher interest rates must
not be charged for time extensions
on payments, and chattel mortgages
may be accepted only on the car it.
self.
These provisions, Mr.. Arnold an
nounced, go far in protecting i'm
proVldent persons of low income.
They remove the severest Of the