Opinion ID: 1503668
Heading Depth: 1
Heading Rank: 5

Heading: Alcoa's Domination of the Fabricating Fields.

Text: The last of Alcoa's supposedly unlawful practices was its infiltration into, and manipulation of, some of the markets for fabricated goods. These were three kinds: (1) buying an interest in the Aluminum Castings Company, and Aluminum Manufactures, Inc.; (2) the Price Squeeze; (3) the Piston Patent Pool. (1) Castings were one of the earliest uses of aluminum; Alcoa began to make them about 1901, and by 1909 there were a number of companies engaged in the business. Five of these combined in that year to form the Aluminum Castings Company, of whose shares Alcoa received fifty per cent in exchange for advances made at the time. It does not appear what proportion of the total output these five companies had been manufacturing; certainly the plaintiff did not prove that they controlled the castings market. Later they acquired a sixth foundry; and in 1919 the combination was reorganized as Aluminum Manufactures, Inc. In 1922 it leased all its real estate and machinery to Alcoa for twenty-five years, and may be regarded as thereafter a subsidiary. We cannot see that in all this the plaintiff has proved anything relevant to the action. If it means that there was a monopoly of the castings market as such, there is no support whatever in the record for such an assertion. If it means that Alcoa's intervention in the castings business helps to support its claim that Alcoa monopolized the ingot market, the inference is extremely weak. Finally, there was nothing in the transactions themselves which indicated that they were independently unlawful, or that they served to make Alcoa's legal position as to the ingot industry less vulnerable than it would otherwise have been. The Aluminum Goods Manufacturing Company makes cooking and other utensils out of aluminum. It was formed in 1909 by the consolidation of three small companies; all its plants are in Wisconsin, and its principal place of business is in that state. At the trial thirty-one per cent of the shares were held by Alcoa and its officers, and this proportion had been thirty-six per cent in 1918. The proportion of the shares held by the three families, which had originally owned the combining companies, was almost thirty-six per cent, and if there were added the shares owned by employees and by residents of the town where the principal business is, the percentage was originally over fifty per cent and has so remained. Four of the six directors have always represented the original interests; the other two have represented Alcoa's interest. The four have frequently shown entire independence of Alcoa, and on several occasions have overruled its two directors, although the two companies have, very naturally, usually acted in unison. Again, we are not clear whether the plaintiff means to argue that by its holdings in this company Alcoa monopolizes, or has attempted to monopolize, the utensil market; if so, there is no support for it. If on the other hand, the charge is that Alcoa invested in the company as part of its monopoly of the ingot market, that may be true. It may have hoped in this way to secure at least a friendly market for its ingot, if ingot competition should increase. As part of its general conduct after the Bradley patent expired, this purchase may thus be relevant, just as its investment in the castings business may be; but, like its investment in that business, there is nothing to support the conclusion that here was a practice or manoeuvre merely to suppress or exclude competitors; and there was no justification for joining the Aluminum Goods Manufacturing Company as a defendant.