Evening star., 1941-02-09
BY Norman NJ. LiheH,
Assistant Attorney General.

NORMAN NJ. LITTELL,
Assistant U. S. Attorney General.
Harris -E1Uing Photo.
erS, altimeters, bore sights, torpedo direc-
tors, gun sights, telescopes and peri
| scopes An American company of Ro-
| chester, N Y, the Bausch & Lomb Opti-
cal Co, manufactured about so per cent
of all military optical instruments in the
! United States and almost all of the in
struments for heavy uses, such as range
finders for heavy artillery and naval
| guns, airplane machine gun sighting
| devices, fire control equipment for anti
aircraft guns, and periscopes.
The two ompanies-Bausch & Lomb
and zeiss-once competed with each
other, but on April %, 1921, they entered
into an agreement to divide the world
market for sale of these instruments into
geographical areas, the United States to
be exclusive territory for the Bausch &
Lomb Co., and the rest of the world for
ZeiSS They agreed not to sell in each
others territory and, through patent
control, to forbid any other manufac-
| turer to sell in violation of the terri
torial agreement. This has resulted in
world control of this business.
BY one paragraph of the contract both
companies agreed to conceal the exist
ence of the contract from third persons.
and insofar as practicable not to disclose
the contract even to their employees. The
Bausch & Lomb Co. agreed to create a
new department solely responsible to the
board of directors charged with the de-
velopment of military instruments and
with maintenance of close cooperation
with the Zeiss Co. in Jena The head
of this all-important military instru-
ment division of an American company
had to be acceptable to the German
company, and actually a German from
the Zeiss Co. was placed In charge.
Military Data Obtained
Note that by contract obligations to
pay royalties on every instrument sold,
the German company had complete in
formation as to the manufacture of all
military optical instruments of major
Importance in the United States. The
number of periscopes would indicate the
number of submarines under construction
and the number of range finders of a
given size would indicate the number
of guns of certain caliber. The Amer
lean company, of course, turned down
many opportunities to sell outside of the
United States because the Zeiss Co. re-
fused to give its consent.
Back in 1885 the French and British
tried to place an order for range finders,
periscopes, gunsights and fire-control in
struments with the Bausch Co., totaling
over 81 SOC, ,000 The Bausch Co. refused
to fill this order and in a public state
ment by high-ranking official of the
company assigned a patriotic motive for
refusing the orders saying "they are not
prepared for war over there and if
we refuse to help them prepare, it puts
it off that much
1t was not until the Antitrust Divi-
sion of the Department of Justice in
vestigated this matter that the relations
between Bausch and Zeiss were dis
covered to resemble military treaty be-
tween two sovereign powers. Critically
important military devices have been
denied to these democratic countries
while their adversary, Germany, was not
only arming, but using our country to
| prevent the democracies from arming.
All of this was terminated by the consent
decree under the antitrust laws in 1910.
Information Important.
In respect to the agreement between
Bausch & Lomb Optical Co. and the
Zeiss Co. in Germany, the correspond
ence introduced in the antitrust suit
against the Bauscn & Lomb Co. clearly
reveals the appreciation of the i'm
portance of the military information
conveyed in the royalty reports as to
manufactured products, such as anti
| aircraft range finders, periscopes, tele-
scopes etc
Furthermore, the exchange OF patent
| information seems to have been some
| what one-sided, for in some of the patent
| formulas given by the German COM
panies, certain steps or elements are
| omitted. We learned of this practice
| during the World War when the United
States Government confiscated all Ger
man patents. 1t also found that missing
information prevented production under
these patents. The defective production
of salvarsan in the United States during
this period resulted in the death of sew
eral thousand soldiers because of faulty
preparation, the correct process having
been concealed by the Germans and
not included in their patents on file.
This device was worked most success
fully on England, where in the produc-
ton of the 100 needed serums and medi-
cines, the missing element concealed
by she Germans in patents on file in
England completely blocked production
in England. Only after spending many
millions of dollars were English cheni-
cal interests able to produce 40 of these
essential medicines.