Evening star., 1950-06-06
5-Year Stability Seen
In Aluminium Industry
By Judge Knox Ruling
Neither Justice Agency
Nor Company to Appeal
Finding in Trust Case
By David Laurence

DJ N0StN AH~T CHCG
Stability may be expected for
the next five years and perhaps
longer in the aluminium industry
Of the United States-an indus
try important to national secur-
ity.
For it became known today that
neither the Justice Department
nor the Aluminium Co. of America
is likely to petition the courts
for an appeal from the decision
just rendered by Judge Knox in
the Federal Court of New York.
This means that a truce has
been reached at last in court
fight that has lasted nearly IA
years and kept investors and en-
ployes in the aluminium industry
wondering what split-up or disso-
luton might be coming next as
result of court decree.
The lengthy decision of Judge
Knox. now that it has been
analyzed by the lawyers on both
sides, would seem to indicate that,
while neither party got all it
asked for from the court, certain
fundamental issues nevertheless
were resolved.
Bergson Claims Victory.
Herbert A. Bergson, head of the
antitrust division of the Justice
Department. told this CORES
pondent yesterday that he consid-
cred the court decision "a signifi-
cant victory" He pointed out, for
example, that the petition of the
Aluminium Co. of America, asking
that 1t be declared no longer a
monopoly. was not granted where
as the Departments cross-peti-
ton, arguing that competitive
conditions have not yet been re-
stored in the industry, was af-
firmed.
The courts principal remedy
to restore competitive conditions
requires eleven big stockholders in
the Aluminium Co. of America
who also have large holdings in
the Canadian company-the larg-
est aluminium producer in the
world-to sell their stock in one
or the other of the two COM
panies. Also Judge Knox held that
certain agreements whereby COM
petitorS of the Aluminium Co. of
America were obliged, in exchange
for Alcoa's various patent rights,
to give up their own information
on research were not desirable any
longer.
What the Justice Department
regards as most important is that
Judge Knox reserved for the court
the right to take a look at the
situation any time in the next five
years to determine if divesting
big stockholders in the Aluminium
Co. OF America of their interests
In the Canadian company results
in restoring competitive condi-
tions. If it doesn't. then the in
ference is left that the Federal
court might have further rem
edy to impose. It may be assumed
however. that the divestiture pro-
gram will be carried out in good
faith. as Alcoa has always con-
tended that the dual holdings did
not influence its pricing or mar
ket policies.
What is most interesting, on
the other hand. is that Judge
Knox did not order the dissolu-
ton of the Aluminium Co. of Amer
lea and compel it to separate
into two integrated companies,
as the Justice Department had
requested. To the extent that
the Aluminium Co. of America,
therefore. has been spared the
'ax of dissolution. it can take con-
siderable comfort from Judge
Knox's decision.
For industry generally. the case
has some significant aspects in
that the Justice Department did
not attack the integration set
up of the Aluminium Co. of Amer
lea or its competitors, conceding
on its face that the manufacture
Of raw aluminium and the fab
ricating Of these ingots into fin
tShed products were naturally COL
lateral in a well-organized busi-
ness in the aluminium field.
There are some implications
too, for other industries involved
in antitrust suits. Thus Judge
Knox, in granting the Justice
Departments request for indi-
vidual divestiture of holdings in
the Canadian company. prescribed
that the process of selling may
extend over a four-year period
SO as to avoid the losses in value
which might enSue if large blocks
OF stock are dumped on the mar
ket for forced sale. In the mean
time. the stock intended for sale
would have its voting rights placed
in the hands of a trustee salts
factory to the court.
The plan suggested resembles
that which was used in the So
called Paramount Pictures case,
and the same form might be re-
quested by the Justice Depart
nlent whenever it gets around to
that point in the proceedings it
has begun seeking to compel the
large stockholders in the Du Pont
Co. to divest themselves of in
6ividual holdings in other COM
panies and particularly If the
enforced sale of Du Points hold
ings in General Motors should
ever come under court decree.