Document Z4dgK27kMBL2bZbLR849goRqd

A CONTENTS Witnesses . FOR THE RESPONDENT DIRECT CROSS REDIRECT RECR0S8 3632-A 3652 3$59 3672  ** OFFICIAL TRANSCRIPT OF HEARINGS BEFORE THE Federal Trade Commission T>-v ; l: r&d 4 DOCKET No...^253. IN t h e ma t t e r r>g. NATIONAL LEAD COMPANY, a oorpora.'tlOD. Bt nl. . PLACE:__ .' September 18 1947 *v$1 : ' u;t;V. <-' f-' PAGCS- 3631 to 3689 k >v{ < . * $*/& * 1 : v. , .1 U' ' , '-**'> ' 1*. *, &'<**/ ' - s m Wv f; .. . . <::4 * ' .i.. Vsv^`\i-> >*v . /` . ^;t vV* -'l4 ; !. . ; /T FEDERAL REPORTING COMPANY ' $ OFFICIAL SEPORTEES 1748 PemuylTtalt Avenue, N. W. WASHINGTON 6,0. a i T "A N39106.01 CERTIFICATE This is to certify that the following pages and related exhibits are a transcript of hearings before the FEDERAL TRADE COMMISSION in the matter of: DOCKET NO. - 5253 CASE TITLE - NATIONAL LEAD COMPANY, a corporation, et al. PLACE Washington, D. C. DATE September 18, 194? PAGES NUMBERED 1$2L_ to_j68------ INCLUSIVE. which were had aa therein appears, and that this ': the original transcript thereof for the files of the Commission. FEDERAL REPORTING COMPANY Official Reporter i i N39106.02 3636 of the Bagle-Picber Company? 2 a. Veil, just the normal duties that Inure to an office of i chief executive of a cocpany of our else and breadth of 4 activity. 5 Q. Do you attempt to run any of those divisions Individually? 6 A. Oh, no. 7 Q. Are you familiar with the general policy in those divi a sions? 9 A. lea. 10 q . low, at the time you made the survey for the company which 11 lad to tha changas of July 1, 1937* did you familiarize yourI! 12 aalf with the competitive policy of the company to the extent 13 fceeessary for that survey? ; 14 A. 15 !> Q. X did. .lad when you became pres Ideat of the company in September, 16 19%1, did you further familiarize yourself with competitive 17 policies? 18 A. I have, since becoming president, kept myself informed on; 10 competitive policies of the various divisions. 20 Q, What was your purpose in familiarising yourself with those 21 policies? 22 A. Something that is obviously necessary to an understanding ! 23 of the business and the establishment of other general poli 24 cies which are dependent upon the competitive position of the 25 company. N39106.03 3637 1 - ft low., did you at any time find any agreements or under- 2 : stand,lng between your conpany and Rational Lead Company, or 3 'i mnj of the other companies engaged in the sale of lead plg- 4 " MQtf, affecting prices or terms o p conditions of sale? 5 |J .A. 6 ; q. Io, I newer found any such agreements. At the time you became president of thecospany, were you 7 concerned In any respect as to whether such agreements ex- Isted or not! i 9 B A* Mo, 1 don't believe It ever crossed my mlud that suoh IJ agreements might exist. *! H ' Q. If you had found any such agreements, what would have 12 , been your policy In respect to them? !> A. Vull, I certainly would have looked into their propriety, 14 | and If I had found that there were any improper agreements of i: it 15 ji that nature in existence, 1 would have taken the necessary 16 steps to terminate them. I? q . Were you particularly conscious at that time of the 18 activity of the anti-trust division of the Department of Jus 19 tice? } 20 I: MR* WRIGHT t Objection, Your Honor. i. 21 ; that that hae any relevancy in this matter. I don't see TRIAL EXAMUfER HORWOOD: Well, I think that 5.e a 23 leading question. .M MR. WOOD: I think It Is a proper question, because 25 Thurman Arnold's campaign was at its height at that time, and 3638 1 every executive In the country vat fooling Tory responsible 2 as to hi# position in regard to the anti-trust lavs; every- 3 ; 'body vas. 4 TRIAL EXAMINER NORWOOD: What tine vas that? 5 . MR. WOOD* September, 19*1* 6 MR. WRIGHTs Counsol has supplied the ansvor that 7 1 he hoped to get froei that very leading question. ft ; TRIAL EXAMINER NORWOOD: I think it is a leading |i 9 jj question, but I think he nay bring out tho fact that he kept 10 up with the lav and the conditions respecting trade agree- 11 : nents, and so forth. 12 MR. WRIGHT: Tour Honor, 1 sue not objecting so auch <i 13 because of the fact that it is leading, but it is an absolute* i! 14 j| ly irrelevant ieatter. Xhovledge has no part in this proceed- 13 1 ing. The fact that the Sherman Act is on the statute books 16 j; and has been since I890 is a veil knovn faot to everyone con- 17 i| nested vith the business. ij is j MR. WOOD* As president of the respondent eorpora- 1 19 . tion, I think the witness should have the greatefc freedom in ji 20 ij i! 21 j, testifying to his ovn state of Bind. TRIAL EXAMINER NORWOOD: I think they have been -7 allowed in all these cases to state their mental attitude to- 23 ward this situation. I will overrule the objection. Let 24 him answer. 2> MR. WOOD: Will you read the question to the witness, 3639 1 2 (The pending question was read by the reporter.) 3 A. Yes , 1 was. 4 By Mr. Voodi 5 q . low, what Is the general coapetltlve problem of the 6 Eagle-Picher Company? 7 A. `Hi* lagle-Pieher Coaqp&ny la not a leader in any one of 8 its respective lines. In several instance it is second in 9 tto field arid in the ease of other products it ranks farthsr 10 down the scale. But Z make the point that not being a leader 11 In any erne of t^e lines, it Is not In position to dictate the 12 sailing price policy in any of the field in which it operates. 13 It mat follow rather than lead. 14 q . In the insulation field, vho< is your principal cosqpetiIS tort to A. There are many. Johaa-Manville i probably the princi 17 pal one. 16 NR. WRIGHTx I object to further question along 19 the line Of insulation. Your Honor, as Irrelevant and Inaa20 terial to this cass. 21 NR. VOODx I am not pursuing the matter, Mr. Wright. 22 I an just trying to bring out the fact that there is a general 21 problem of the company in respect to which it has a formulated 24 policy. 25 TRIAL HXM IREB NORWOOD! 1 think he wants to give 3640 I us a complete picture of this company In throwing light on 2 it* various activities. J By Mr. Woods 4 q. lov, who Is your principal competitor in the sale of 5 zinc products? 6 A. Rev Jersey Zinc Company, vitu some substantial eoapeti7 tion fro* St. Joseph Lead Coap&ny and American Zinc, Lead 4 8 Saelting Company. 9 q . And vho is your principal cospetitor in the sale of lead 10 plgaentsf li A. Rational Lead Company. 12 Q. And vho is your principal competitor in the sale of lead 11 produeta? 14 A. Rational Lead Cospany and Federated Metals Division of 15 American Smiting 4 Refining Company. 16 Q. Is it your coapany*s policy to compete in any of these 17 fields by mins of price vars? m A. Ko. if Q. lov vould you define a price var? 20 A. A situation in which competing companies are constantly 21 lowering prices to gain a larger segment of the available 72 business. 21 Q, How, if the second largest company in a given field com 24 mencea a price war, vhftt is the probable result, in your 25 opinion? 3641 I A. It will lose aoney and ultimately the More strongly \ 2 entrenched company will win out in tho war. 3 q . if you lover a price below your competitor *s price, hov 4 long 1# that competitive advantage likely to last? 5 A. Hot any longer than it takes the competitor to lover his 6 price below ours. 7 q . Does your company compete with the Rational Lead Company 8 In the sale of lead pigments? 9 A. It does. 10 Q. How does it do it? II A, By endeavoring to maintain a higher quality in its pro 12 ducts and to give servlees to its customers over and beyond 13 that given by its major competitors. M q . If your company does have superiority of product in this 19 reapeot to a competitor la that an advantage to your oosqpany? 16 A. Obviously. II q . Why, in spite of the fact that you said "obviously*? 18 THE WITNESSi Will you read the previous question? 19 TRIAL EXAMINER NORWOOD: Will you read the question? 20 (The question was read by the reporter.) 21 TEH WITNESSx A superior product available at the 17 same price will sell mere readily than the inferior product 23 available at that price. 24 By Mr. Woods 25 q. Can your competitor match that product, neoessarily? 3642 i A. Kot necessarily. Q. Has your company engaged in any research activities? 3 i A. Yes, we have very extensive research facilities, both 4 local plant facilities and central research activities. 5 q . What if any is the relationship between your research 6 activities and your competitive policy? 7 A. One of the major objectives of the research organization is to strive constantly to Improve our products and to work with our customers la producing a product that will meet their requirements or will enable them to improve their products n ! through the use of our products. 12 t q . Has your company engaged in any institutional advertis !. 13 ; It ing? M A. Yes. That i> one of the things that I have done since 15 I became president of the company, inaugurating a program of 16 institutional advertising. 17 Q. Vhat is the general scope of that program, or I had better Ifl say, vhat has been the general scope of that program? 19 A. It has varied from year to year as to the media employed, 20 but its principal purpose has been to acquaint the business 21 and financial community with the Eagle-Ficher group of com 12 panies, their financial strength and stability, and inci 23 dentally, with the products which Eagle-Picher manufactures 24 and which by reason of their limited consumer use are very 25 frequently unknown to the general public. 3643 I Q, In what magazines have you advertised, in generalT 2 A, Tim, Hews Week, Collier *s, Wall Street Journal, Chicago ^ 3 Journal of Commerce. 4 q. Is it your opinion that that type of advertising has any 5 effect on customer acceptance of yout products? 6 A. I think it 'has a very material effect. 7 q . Is that type of advertising Intended to Increase your a business .to local area or nationally? 9 A. nationally. 10 Q. la it the policy of your company to compete on a national. 11 basisf 12 A. Tea. 13 Q, Sid you read the testimony vhlch Mr. Goetz and Mr. 14 Burner and Mr. Chubb gave before the Commission In July? II A. 1 have read Mr. Goetz*s and Mr. Earner's testimony. I 16 do not recall that I read Mr. Chubbfa. If Q, Does their testimony represent the type of service and 18 help which it is your policy to give the customer? If MR* VRIGHPj Objection, four Honor. If this wit- 20 nesa is going to testify as to the type of activities that 21 counsel le referring to in this question, he should testify to 22 them directly himself rather than by adoption of another wit- 23 ness * testimony when he has not even been in the room vhen it ; 24 was given. : 25 TKJLAL KXAM1HJ3* HOKVOOJDi I think it would save a