Evening star., 1938-04-03
CHRYSLER FILES
FINANCING ACTION
Wants D. c. Court to Uphold
Legality of Contracts
With Dealers.

In move which apparently caught
Government attorney unawares, the
Chrysler Corp. yesterday asked Dis
trict Court here to render a declara-
tory judgment upholding the legality
of its contracts with its dealers with
respect to financing time payment
sales.
The dealer contract systems used by
General Motors. Ford and Chrysler
companies have been under fire by the
Government on complaint that they
constitute violation of the Sherman
antitrust law.
Believed to be the first time the de-
claratory Judgment act has been used
against the Government in an anti
trust case, the Chrysler petition named
Attorney General Cummings as re-
spondent. Mr.. Cummings was absent
from the city when the corporation
action was taken yesterday. and De-
partment of Justice officials said no
decision would be made as to their
conduct in the case until he returns
on Tuesday
Continued HaraSsment.
Claiming it has no interest in and
no contractual relations with any
finance company, the corporation
stated in its petition that it desires
to obtain an adjudication as to the
propriety of such contracts with
Dealers so that it may continue its
business without being subjected
to continued harassment from and
claims of illegality"
The petition states also that more
than so per cent of all new cars pro-
duced by the Chrysler Corp. are pur-
chased at retail from its dealers, dis
tributors and associate dealers on
time payment plans and that large
proportion of its dealers and associate
dealers require financial assistance
during the time the cars are held bv
they for sale.
Furthermore, it is stated. the
amount of the financing charge paid
by retail purchasers is an important
factor in the merchandising of
petitioners products, and in the COM
petition between petitioner and other
manufacturers of automobiles, since
the charge involved in the purchase
OF automobiles on time payment plans
is considered by the purchaser as part
OF the total selling price of the
automobile. It, therefore, is to the
interest of Chrysler Cooperation, 1t
was pointed out that there be made
available to its dealers, associate
dealers and to the public, financing
facilities at low charge because the
obvious effect of the low finance
charges is to enable the buying public
to obtain automobiles at lower price
and thereby to increase sales.
Financing Standards.
For this reason. the corporation
requires that certain financing stand
ards be maintained, a circumstance
contributing to the Government
complaints.
Yesterdays development was an
echo of a sensational series of events
last year, starting with the Govern
ment proceedings against the three
companies and Federal grand jury
investigation at Milwaukee, During
the course of the grand jury probe,
Federal Judge Ferdinand A. Geiger
suddenly dismissed the jury before it
had reported. his grounds being the
discovery that negotiations for a con-
sent decree in the cases had been
under way between the companies
and the Government.
The Chrysler petition yesterday was
filed by William Stanley of Washing
ton, former assistant to the Attorney
General, and the New York law firm
Of Larkin, Rathbone and Perry, coun-
sci for the corporation.