Opinion ID: 1503668
Heading Depth: 1
Heading Rank: 4

Heading: Suppression of Competitors Seeking to Invade the Ingot Market.

Text: The plaintiff relies upon two transactions as showing that Alcoa tried to suppress incipient competition by purchasing interests in two Norwegian aluminum companies; and a third, by purchasing interests in water-power at the head of the Saguenay River, Canada. The Ford Motor Company, in the winter of 1920-1921, wished to secure an independent source of aluminum; and one of its representatives met Haskell, the president of the Baush Company, and consulted him about getting one. Haskell in that winter saw Kloumann, the representative of a Norwegian company, which we may call A. H. Norsk; and Haskell got an option on the property. There was a sharp dispute as to whether Arthur V. Davis learned of these negotiations; but we shall assume that he did so shortly after May 18, 1921, in spite of the fact that the letter which conveyed that information was excluded. In the following July, Alcoa agreed with Kloumann to buy a half interest in A. H. Norsk, and bought it in October, 1922, after Davis had got permission from the Attorney General in accordance with the requirements of the decree of 1912. In the letter in which he stated the case to the Attorney General, Davis declared that he wished to have the property in order to compete with German producers abroad; and that is the reason which he gave on the stand, and which the judge accepted. This evidence also admits the interpretation that Davis wished to head off Haskell, and perhaps in fact he did; but we cannot see that the issue differs from that which arose over the purchases of bauxite and water-power. It is impossible to say á priori what motive actuated Davis; even though he knew that his purchase would interrupt Haskell's negotiations on behalf of the Ford Company, it by no means follows that he did not wish the property for the reasons he gave to the Attorney General. Indeed, the plaintiff did not prove that there were no other sources of foreign aluminum open to the Ford Company; or even that there were no plants which it could have bought. The purchase of the other Norwegian plant had no accompaniment of cutting out American competition; as to it Alcoa's good faith must certainly be accepted. The last transaction was Alcoa's intervention in a large power development at the source of the Saguenay River in Lake St. John, Canada. This lake is of large area and capacity; and at some time before 1922, James B. Duke, a very rich financier, had secured two water-powers close to the outlet, about eighteen miles apart, called the Upper, and Lower, Developments. The Upper Development was built by 1924, but the Lower Development was not completed till 1931. In 1922 a representative of Duke proposed to Davis that he should take some of the power from the Upper Development but nothing was done; but in 1924 Alcoa was planning to build a plant at Arvida, near the Saguenay River; and at some time after October 15 of that year, Davis and Duke resumed negotiations, though this time for the purchase of the Lower Development. These resulted in its purchase in July, 1925, by means of a merger into Alcoa of one of Duke's corporations, which owned the property. When Duke died in October, 1925, his executors wished to dispose of the Upper Development also, and Alcoa obtained a fifty-three and one-half per cent interest in it during the spring of 1926. All the power used at Arvida has come from the Upper Development; and Alcoa, after finishing the Lower Development, sold the power to others, until 'Limited acquired the property in 1938. In October, 1924, the brothers, Uihlein, who had formerly been brewers in St. Louis, and had already bought a bauxite deposit in British Guiana, conferred with Duke about using the power of the Upper Development to make ingot; but nothing came of these negotiations. Davis said that the Uihleins told him that, when he and Duke began to deal with each other in the autumn of 1924, they had entirely abandoned the idea of going into the aluminum business, and so the judge found. The Uihleins, having given up the bauxite business, sold out their deposits in British Guiana in December, 1924, to three equal interests, of which Alcoa was one. (This was one of the purchases considered in the preceding heading.) Haskell on his own account also negotiated with Duke for an interest in the Upper Development, but these negotiations had ended before Duke's death. The plaintiff argues that Alcoa was aware of the negotiations between Duke and the Uihleins, and between Duke and Haskell; and knew that, once it had secured the Lower Development, Duke was sure to lose interest in any independent aluminum plant. It adds that the fact that Alcoa has never used the Lower Development to manufacture ingot, shows that it must have been bought for another purpose. Alcoa answers that its original purpose was to develop the Lower Development after the Arvida plant had been built, meanwhile taking power from the Upper; that it was only after Duke's death that it bought a share in the Upper; and that the Uihlein and Haskell projects had nothing to do with its purchase of the Lower Development. This answer is not so patently implausible an explanation that the judge was bound to reject it, and to find that the plaintiff had carried the burden of proof upon the issue.