Word: ftc
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Dates: during 1950-1959
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After poking its head into the board rooms of thousands of corporations in the U.S., the Federal Trade Commission last week reported that it didn't like what it had seen. Said FTC: "Interlocking relationships among the directors of the 1,000 largest U.S. manufacturing corporations constitute a threat to competition." What was even more alarming, FTC Chairman James M. Mead told a House Judiciary subcommittee, was that there were ways to interlock that Congress had not covered when it passed the Clayton Anti-Trust Act. The law, he said, "can be so easily evaded as to be scarcely...
...FTC found that companies could get around the law by having officers or stockholders who were not directors in their own company act as directors or officers of other companies. In the Big Four electrical machinery companies (R.C.A., G.E., Westinghouse and Western Electric), FTC found almost every brand of interlocking directorates...
This, said the Federal Trade Commission, violated the 1936 Robinson-Patman Act, which Congress passed to protect small businessmen against just such practices. FTC argued that Standard could not legally reduce prices to big customers just to meet competition, could do so only if the lower prices reflected actual savings from the bigger orders...
When Standard protested, it found itself with a strange ally: the Department of Justice agreed. Nevertheless, the Federal Court of Appeals upheld FTC. Ruled Appellate Judge Sherman Minton (who has since become a Supreme Court justice): the deciding fact was not good faith, but the fact that "Standard had given a club to their retailers to bludgeon their competitors...
...curtail it that a seller would have no substantial right of self-defense against a price raid by a competitor . . . The seller may well find it essential, as a matter of business survival, to meet the price rather than lose the customer." The Supreme Court gave orders for FTC to determine whether the price cut had been made in "good faith." Since it is almost impossible to prove that a person or corporation did not act in "good faith," the decision was a body blow to FTC and the Robinson-Patman...