Document jgdnJj1dQGev2da1Vmvd68Eop

f Proceedings. Hearing Boom, federal Trade Co: Washington, D. C., feeptember 16, 1947. [ent, at 10 :00 a.m Examiner. ' for the Respondent 0 Broadway, New Yefe-iSm Richard Senvies, Atternera le-Picher Sales Compan^rani bmpany. (Anaerjesa W&M- orney for BespondentaA^ Company and Company. (120 (815 15th Street, ul R. Dixon, atiorB^^fer eng s. Pbe hearing will 23rd of July, iMffhsm* jsned at 10 o 'clock *,>*, tn Room 332, (Mtm3 Washington, I>. 0. , peared: ; aOSe appearing Imp ifee ^^wSTSSsi Testimony of Frank H. Hnrless. 1841 Henry E. Gardiner appearing for Anaconda Copper Mining Company and International Smelting & Refining Company. _ James T. Welch appearing for The Sherwin-Williams Company. Joseph S. Wright and Paul R. Dixon appearing for the Federal Trade Commission. Yon may call yoor witness. Mr. Gardiner: If Yonr Honor please, I would like to rail Mr. Frank Hnrless. FRANK H. HURLESS was thereupon called as a witness for the respondent International Smelting & Refining Company and, having been first dnly sworn, testified as follows: 3487 Direct Examination by Mr. Gardiner. Q. Will yon please state yonr name and address! A. Frank H. Hnrless, Lowell, Indiana. Q. At the present time, what is yonr occupation? A. At the present time I am employed by the Interna tional Smelting & Refining Company in the Midwest area as a special representative. My duties consist right now mainly in the purchase of copper serap for refining at Ana conda, Montana, and Perth Amboy, New Jersey. Q. When were yon first employed by that company? A. In 1922. Q. Will you kindly outline your activity with the Inter national Smelting & Refining Company from that date down to the present, giving yonr various assignments with the company? _ A. At first I was employed as a checker in the construc tion of a zinc oxide plant at Akron, Ohio. Q- What time was that, when, what year? A. 1922. My duties consisted in checking on the use of supplies and materials and the labor used in construct ing the plant, as the construction was on a cost-plus basis. Subsequently I was in charge of the small plant office at Akron, Ohio. In 1927 I began part-time sales work, and about 1929, as I recall it, I began full-time sales work. _ 3488 In 1929 I was transferred to the main office at East Chicago, Indiana. 1842 Transcript of Proceedings. Testimony of Frank S. Hurless. 1843 In 1930,1 was made district salesmanager and had charge of the dry white lead and zinc oxide sales in the Midwest area. In 1936 I was made assistant salesmanager, and had charge of the sale of dry white lead, white lead and oil and zinc oxide. ' While assistant salesmanager, I virtually had charge of the sales of all territories, inasmuch as our official sales- manager, who was located in Ahron, Ohio, had other dnties winch prevented him from giving full time to sales work. then in 1938 I was made salesmanager, and had fall charge of the sale of dry white lead, white lead and oil and me oxide m all territories. ^ cn$` did you first have anything to do with the Bale of white lead and oil? A. In 1931. a;inen<i^d complaint in this proceeding defines p5gmnt commonly known in the phate cf Ga^' jasie carbonate and basic sul- ead} ^Ine lead, red lead; or red oxide of lead lead paste lead) 0range milieMl and grinders5 S iS0^en?/s marketed either as dry pro- 3489 of ^paste f-4j po^der ?r 111 oil- in the form nwJfif1" "^^tare with linseed or other oils, prodnoed K e,ovfrJed V this definition have been lag Compel spondeiit' International Smelting & Refin- q. Td wMte leadaild oil. X Yes tG0Se tite 0ldY ones? dry white lead? ^^^tional first start to manufacture \ ot 1&3d l "d"Cted? PlSotafegaa^,1^ V^oincsi at the ft By what to that tame? A. By the Bo yon vphite lead produced prior ^P-ducts Company. ad resnond? fBad to reA. ;i respondent. Anaconda Copper Company was a suh- 7 of the Anaconda Copper Mining Company, as was iteraational Smelting & Refining Company. So yon know whether there was any subsequent in this relationship! Yes, there was. ,x Is the Anaconda Lead Prodncts Company still jgjjBtvilvC * i Ko, it is not, _ | What hecame of it? I, The assets and properties of the Anaconda Lead ' jjjds Company were taken over hy the International gilg & Refining Company. o, Is the Anaconda Lead Products Company as a comIsi in existence, do yon know? 1, it was dissolved, j Bo yon know when? 1 Ih the latter part of 1936. j, When did the Anaconda Lead Products Company )start to produce dry white lead? A i In the latter part of 1919. 11). Aid do yon know when they first made sales of that i In the first part of 1920. .1 (j, Do yon know how much of a factor thus production ms a fee total output of dry white lead In the earlier , pdf production of that commodity by thus company! | if,fright: Objection, Your Honor. This witness is 'Awn to have been employed or to have had any conArt these products prior to about 1930. 1 Trial Examiner Norwood: In the question, how Irach of a factor, it seems to me the term "factor*7 is not very definite. Yon must show any percentages ilMutbe knowledge of this witness. . Ik. Gardiner: I will withdraw that question, KalExaminer Norwood: Yes. fyMr, Gardiner: I Are yon familiar with the figure showing the profttidiof the International Smelting & Refining Company Into lead during the period that it produced dry white la! i i lam. . , I land you an exhibit and ask that it be marked Kent's Exhibit No.-- jscript of Proceedings. e district salesmanager and had eharp d and zinc oxide sales in the Midwest ade assistant salesmanager, and ki11 if dry white lead, white lead and oil alesmanager, I virtually had charp ritories, inasmuch as our official safesated in Akron, Ohio, had other duties from giving- full time to sales work as made salesmanager, and had fi dry white lead, white lead and oil erritories. first have anything to do with tfe i oil? (omplaint in this proceeding defers ead pigment commonly known in fee , both basic carbonate and basi-e solad, red lead, or red oxide of lead, f lead, orange mineral and grinders' Kits as marketed either as dry pro of dry powder or in oil, in the fom mixture with linseed or other ofis. covered by this definition have been it. International Smelting & ind white lead and oil. y ones? tahonal first start to manufacture l of 1936. operation conducted? . Indiana. p TM1*** ** * wsa# dry white lead produced prior ^d Prodncte Company. * *#** at .company had hi re*d Axtaconda Copper ^^rodnete Company was a sub- I ' ' I- Testimony of Frank H. Rwless. 1843 sidiary of the Anaconda Copper Mining Company, as was the International Smelting & Refining Company. Q. Do you know whether there was any subsequent ehange in this relationship? 3490 A. Yes, there was. Q. Is the Anaconda Lead Products Company still in existence? A. No, it is not. Q. What became of it? A. The assets and properties of the Anaconda Lead Products Company were taken over by the International Smelting & Refining Company. Q. Is the Anaconda Lead Products Company as a com pany still in existence, do you know? A. No, it was dissolved. Q. Do you know when? A. In die latter part of 1936. Q. When did the Anaconda Lead Products Company first start to produce dry white lead? A In the latter part of 1919. Q. And do you know when they first made sales of that product? A In the first part of 1920. Q. Do you know how much of a factor this production was in the total output of dry white lead in the earlier years of production of that commodity by this company? Mr. Wright: Objection, Your Honor. This witness is not shown to have been employed or to have had any con tact with these products prior to about 1930. . Trial Examiner Norwood: In the question, how 3491 much of a factor, it seems to me the term "factor" is not very definite. You must show any percentages within the knowledge of this witness. _ Mr. Gardiner: I will withdraw that question. Trial Examiner Norwood: Yes. By Mr. Gardiner: Q. Are you familiar with the figure showing the pro duction of the International Smelting & Refining Company of white lead during the period that it produced dry white lead? A. I am. _ Q. I hand you an exhibit and ask that it be marked Respondent's Exhibit No.-- 1844 Transcript of Proceedings. Testimony of Frank H. ffi Trial Examiner Norwood: I think it will be 190. I trill ask the counsel to cheek. Is the next respondent's exhibit 190? Mr. Wright: I can ascertain that in just a moment. Trial Examiner Norwood: Off the record. i i), Were these secured from tire pul mu of Mines known as the "Minerals I L I do not know. \ (Discussion off the record.) Trial Examiner Norwood: On the record. Mr. Wright: According to my records, it is 190. *+ fnij. Examiner Norwood; Very well. We will mark it ltflj to D0 )&XG Then yon cannot tell me where w Id those figures? : was" 's A, Well, you could get the figure States Bureau of Mines. But whether c By Mr. Gardiner: 3492-A-i siow7on Respondent's Exhibit marked for doemifSlf&S?1 1 Md " yn haTe sem bum the exact physical form we got i Trial Examiner Norwood: Is that &tial? Is that part of the confident! 7 information? .: A. Yes, I have seen these figures before. Q. A. JJo you know anything about their preparation? they were prepared under my supervision. Q At whose request? A. At the_ request of our counsel. Q. What does this record purport to show? The Witness: No, I do not think tl . wnsidered confidential, because my u eyone writing for it can secure it i lr36S. ! Mr. Wright: Your Honor, I real! 7 tf Mines does publish in its mineral y te total production of these various | 7 M I have no way of knowing wheth SSSL Of dry white lead m the United States for the yLs i lies that appeared inthe``Minerals .7 ;; public information, ornot. i JL3* W8S ^ ^3as^s on these figures were eal- ' i By Mr. Gardiner: ; faitn tbe total production of dry white from Emitted -sSSSffl SSen fr *!!e on that a ^ew preliminary questions Trial Examiner Norwood : Very well By Mr, Wright: from n^easV0rm WGre the figIires secured 3493 ** offife ISn o?MnSe PnblJ?ie<J . they are in book form nr fnfA l aink sometimes tog the United States Bureau of mSs direct"6*1 ^ ^ 71 3194 Q. Mr. Hurless, when were tl 7 do yon recall? ; I A. I do not know the date, but I j 1 probably a few months after this eon ! Q. And do you recall at that time 7: 10 far as the compilation of these rej 7 securing the information on the woi tee any directive to you as to hoi ihe figures on the United States pi ... Mai? ! A. Well, we were not told where fa figures; that is, whether from! Book" or to write the United States 1 I do know that at East Chicago v copies of the "Minerals Year IBook' j whether or not these figures were ad j ir not, I cannot say. ; i Mr. Wright.: Your Honor, may w i a minute ? ; Trial Examiner Norwood: Off tl (Discussion off the record.) ! Mas f Proceedings- I think it will be 190. I win hibit 190? n that in just a moment. Off the record. ) On the record. ^ i my records, it is 190. Very well. We will mart i was marked Respondent's ) ndent's Exhibit marked for d ask if you have seen tMs igures before. bout their preparation? !er my supervision ounseL irport to show? show the percentage of In white lead of the total proUaited States for the years hieh these figures were cal l production of dry white ken from figures submitted kSines. The figures for fee e taken from our records - Bast Chicago, Indiana, few preliminary questions ery well. were the figures secured fee regularly published hes. I think sometimes Testimony of Frank H. Hurl&ss. 1845 O. Were these secured from fee Publication of the Bu reau of Mines known as the "Minerals Year Boo q[ The/yoncami'it tell me where we could have access tr We* you could get the figures from the United States Bureau of Mines. But whether or mot you wouM get them in the exact physical form we got them, I do not know. Trial Examiner Norwood: Is that information dential! Is that part of fee confidential Bureau of Mines "Switals-. No, X do not think that this informal is considered confidential, hecanse my "" anyone writing for it can secure it from the Bureau ot "lb'Wright: Tour Honor, I realise that the Bureau of Mines dfes publish in its mineral year hooks ^ fee total -production of these various products and others, I We no way of knowing whether these are fee fig"s^peSS in the "Minerals Tear Book", which is public information, o t not. By Mr. Gardiner: ^ 3494 Q. Mr. Hurless, when were these figures compiled, A. dx doTotd the date, but I would say that it iaas OTohahlv a few months after this complaint was issued- P O And do you recall at feat time what fee request was bo far ^mpilation of these records mfe relation to the imfoimatLon on the world production* Was there^ny directive to yon as to how yon were to se<mre the United States production m this ma- ^T'Vell we were not told where we should go to get arfiZS; ttat is, whether from the "!&* Book" or to write the United States Bureau of Min Ido Cw that at East Chicago we always: _ copies of the "Minerals Tear Book" m onr hhrary. Bat whether or not these figures were actually taken from tna Tour Honor, may we go off the reeord just a Trial Examiner Norwood: Off the record. (Discussion off fee record.) 1846 Transcript of Proceedings. Testimony of Frank H. Hu Mr- Gardiner: j should like to offer at this timP r> Gpondeat's Exhibit 191 in evidence. 6 Ee` it iTYour Honor, I have no objection provided it is admitted subject to motion to strike later proved o aq ' that the basic data from which this exhibit was com 3495 pled is not made available on my request! fet to taSST N0IVOOi: a WiU bc admitted -4. I |y.jjr. Gardiner: J (j, Did the Anaconda Lead Products : Rational sell dry white lead to the tra j fcyose a sales agent for some or all of I A They sold the dry white lead on ; jrfflgh a sales agency. . ` Q. What was the name of this sales i A The Anaconda Sales Company. . Q, What connection did this sales ag< ; gjandent International or with responds ; ^lining Company? A. The Anaconda Sales Compa I)Sit l92TMreil?fiSon?) TMS malked EesP"<i'* 1 If of the Anaconda Copper Mining Cc - temational or is International. By Mr. Gardiner: V (j, Why was the Anaconda Sales G sties agency? _ _ hibit 192 fo^ WmHfiL+CUmeni esPondent,s Ex l Because in certain States it is lice: it before? aiid as^ yu if you have seen n' ?-e?'1 have seen these fieures hp-fWc piere the International Smelting & Ke .i licensed to do business. _ . ; Q. To what class of trade did Anaco: A. ^J were^rS preparation ? Cppany and International sell dry w q. Where?"" prepared mder my supervision. A. M East Chicago, Indiana. AQ.. Xe %SerrTMrSt pflirprt t0 show? ; A, They sold principally to manufac sranic products. | Q, What was the price basis or sys | aria Lead Products and International BaJes by Internationa? ofPthe tnf tEe Percentage oi Q S" *510( sate " I kit I A. On the basis of f. o. h. East Chica ] feed. . eouteit e jas,s n these figures were oI- y i). To any point in the United State A. As I: recall it, that was the case. ; Q. Was any change subsequent m; system.? A. Yes. : Q. What was. it? I. We established a par zone and a Q. What do you mean by par zone1 A. The territory in the United Stat Mountains was considered the par zon qualifications. * 1 iave no objection subject to +b Trijjl "htujecc to the same JTM? *gSfedt h` i8 50 woeivod ^ SESPOmS^^fors TMAed for Mm. ,a evidence.) iy4 was received J Kst of and including the Rocky Mount f the Pacific Coast zone. : : &S8 Q. "What was the par zone? ; ! part of the United States that j hat group, hut what distinguishes tl: | Coast zone? What was the differenci 1 inscript of Proceedings. t should like to offer at this time Jfc iyi in evidence. JJ I?n0r,J haJe 110 objection provided -et to motion to strike later provided data from whieh this exhibit wae eS de available on zay request, tter Norwood; It will be admitted mh ^NI S EXHIBIT 191, was received rflLth^doS"t 1)6 ^kedle'o- 192 for identification. iSiln0) WaS marM %?kyn ' u asK >on ir you have seen "fAese figures before. J Indiana. ulSort ^lr^rt to show? of The totJ^T thf Percentage of he Tears speJifie^ ^ f Saie* ' n Whic^ thSse figures were eak safes apartment at EawsteCrehictaakgeon, like to #. t? ik*T mm1e11 qeuviadleiSilceenHBe^ * ^section subject to the same- j to, In SJLj , receiV<**P* marked for idea- received || fil Testimony of Frank E. Earless. 1847 By Mr. Gardiner: Q. Did the Anaconda Lead Products Company and In ternational sell dry white lead to the trade directly, or did they use a sales agent for some or all of their production? A. They sold the dry white lead on a direct basis and through a sales agency. Q. What was the name of this sales agency? A. The Anaconda Sales Company. Q. What connection did this sales agency have with re spondent International or with respondent Anaconda Cop per Mining Company? A. The Anaeonda Sales Company is a subsidiary 3497 of the Anaconda Copper Mining Company, as was In ternational or is International. Q. WTiy was the Anaconda Sales Company used as a sales agency? __ A. Because in certain States it is licensed to do business where the International Smelting & Refining Company is not licensed to do Business. Q. To what class of trade did Anaconda Lead Products Company and International sell dry white lead? A. They sold principally to manufacturers of paint and ceramic products. Q. What was the price basis or system on which Ana eonda Lead Products and International first sold dry white lead? A. On the basis of f. o. b. East Chicago, Indiana, freight allowed. Q. To any point in the United States? A. As I recall it, that was the case. Q. Was any change subsequent made in this pricing system? A. Yes. Q. What was it? A. We established a par zone and a Pacifiic Coast zone. Q. What do you mean by par zone? A. The territory in the United States east of the Rocky Mountains was considered the par zone, and the territory west of and including the Rocky Mountains was considered the Pacific Coast zone. _ 3498 Q. What was the par zone? I understand it is part of the United States that was included within that gronp, hut what distinguishes that from the Pacific Coast zone? What was the difference between them? 1848 Transcript of Proceedings. Testimony 0f Frm A. There was a difference in price of one-quarter iw per pound. ' '"U ^a]rx:amiIier Norwood: In favor of the par zone? The Witness: That is right. By Mr. Gardiner: . . do d understand that the material was snM m the par zone f. o. b. where? W A. East Chicago, Indiana. Q. Freight allowed? A. Freight allowed. Q. Within any part of the par territory ? A. That is right. Q. And what was the situation so far as the Pacific Coast zone was concerned? A* J* ,^as s?ld f o. b. East Chicago, Indiana, freight more. ^ ^ PnQ ne'(iuarter of a cent per pound te'seffi^d^wteteTeSr168 adPt ttiS "ystm> comnpHfn^i' 'VPe,adoPtecl it because it was adopted by our we went-along on the same basis. 7 system? ^ JOn kQW tilat yonr comPetitors had such a 3499 foma? WoS V6ry easy for us to Pick up in- the oriraup 3 ^^ardmg our competitors' practices in prospectiyf customerPr0dUCtS frm Ur Customers and and'thf answer? ^ yoa read m7 last question, please, Bead Oe question. v luestion and answer were read.) By Mr. Gardiner: how did yoi^ham C011lPetitors were concerned, . Mr. Wright- t-h-e--i-- Pnces . wvveCrlet??2 . C' tious. ' Objection, Tour Honor. That is repeti tion overruled. 1 ^orwood: No, let him answer. Objec- The Witness - mm _ . ' (The pending questim?VGpeat ft Question, please? . tess: We competitors' prices eonld very, easily learn what prospective customers^03*6 ^y as^-n' ur customers and J ByHr. Gardiner: | 5, How did you determine w 3 &1selling tactics were? How 1 i By making inquiries fro ; relive customers. 3 Mr. Wright: Your Hoi questioning because it is i of time. So far as we k: about the period from 1922 to ti toany specific instance. Inal Examiner Norwood: 1 ley made a change in ffhe par 5 ' sal the operations thereafter. Mnite. You may cross-exami By Mr. Gardiner: Q, Did Anaconda Lead Pro i ay quantity discount on the s: 3 L Yes, they did. : {J. What discount was allov 1 I A discount of one-quart 2 less earload price was allowe' i we, : i I Q. Was this disconnt allov | Paeific Coast zones ? . ' t L Yes. . '| : Q. Why was such a diseou ; I. Well, we allowe d ` such s : general practice of eoxnpetitio Q. How did yon know tha- fe of competition ? . A. By contacting- our eusi tamers we would learn what; pricewise. : 3501 Q. Did yonr compan railroads and industrial! A. Yes. A ! Q. Why were different pr idustrials! . 1 Mr. Wright: Yonr Honor; timing. It is not restricted : about another matter than th Trial Examiner Norwood:; taijai Proceedings. I- n price of one-quarter cent n favor of the par zone! fiat the material was sold r territory? ion so far as tie Pacific Chicag-o, Indiana, freight rter of a cent per pound dopt this two-zone system se it was adopted by ottr nt the same basis, r competitors bad such a for us to pick up in>mpetitors' practices in om our customers and ny last question, please, d tfce question, read.) stators were concerned, s were? '. Jonor. That is repeti- lmt answer. Objec- J* question, please? learn what our OBr customers and Testimony of Frank H. Hurless. 1849 By Mr. Gardiner: Q, How did you determine what your competitors' gen eral selling tactics were! How did you determine that? A. By making inquiries from our customers and pro spective customers. Mr. Wright: Your Honor, I object to this line of 3500 questioning because it is not restricted to any period of time. So far as we know, we have been talking about the period from 1922 to the present. It is not limited to any specific instance. Trial Examiner Norwood: It applies to the time when they made a change in the par zone and Pacific Coast zone, and the operations thereafter. I think that is sufficiently definite. Yon may cross-examine him further on it. By Mr. Gardiner: Q. Bid Anaconda Lead Products or International allow any quantity discount on the sale of dry white lead? A. Yes, they did. Q. What discount was allowed? A. A discount of one-qnarter cent per pound under the less carload price was allowed for earlots of 20 tons or more. Q. Was this discount allowed in both the par and the Pacific Coast zones! A. Yes. Q. Why was such a discount made? A. Well, we allowed such a discount because it was the general practice of competition. Q. How did you know that that was the general prac tice of competition? A. By contacting our customers and prospective cus tomers we would learn what our competitors were doing pricewise. 3501 Q. Did your companies quote different prices to railroads and industrials? A. Yes. Q. Why were different prices quoted to railroads and industrials? _ Mr. Wright: Your Honor, I object to this line of ques tioning. It is not restricted as to time. We are talking about another matter than the zone matter now. Trial Examiner Norwood: You may clarify that 1850 Tramcript of Proceedings. By Mr. Gardiner: Q. Subsequent to the adoption of the par and Pacific Coast zones, did your companies quote any different prices to railroads and the industrials? A- Yes. . Q. Why were different prices quoted to railroads and industrials? * A* Well, we quoted different prices to railroads and industrials because competitors were likewise quoting such prices. Q. How did you learn that your competitors were quot ing different prices to these groups? A. By contacting industrial and railroad accounts we would find out what our competitors were doing pricewi.se. Q. Throngh what medium did you make this contact? A. Usually through our salesmen. Q. During the period subsequent to the adoption 3502 of the two-zone system, do yon know generally what _ the profit and loss situation was so far as the produc tion and sale of dry white lead was concerned? A. Well, in a general way-- Trial Examiner Norwood: Answer yes, if you know. The Witness: Yes, in a general way I know. By Mr. Gardiner: Q- What was the situation? Mr. Wright: I object, Your Honor. What profit and loss situation might have been at a particular time is absolutely irrelevant to the issues of this matter. Mr. Gardiner: If Your Honor please, I think it is very pertinent, because we are discussing the matter of pricing practices and the matter of competition, and it is impor tant to determine what relation the pricing practices of a company had as to whether or not they were making or losing money. Mr. Wright: Now, Your Honor, if that is counsel's purpose, to show that any one of the pricing practices had any effect on their profit and loss, it can hardly be establisned in this way. It is going to be necessary to get into tne whole profit and loss structure of the company, and we are going to open up a field here that is going to be endless if we are going into the question of profit and loss as hav- ^ anything to do with the changing or establishing 3503 of zone systems in this case. Testimony of Frank H. By % Gardner: Well, of course the IdiD directed to the adoption of fading questions dealt with. prices S1 jji industrials were concerned, and 1 Rurally knew what the situation was. ie answer was yes. Now X Have ask Ration in general was. i Trial Examiner Norwood: I thinkj |etrack here, I really do. I will sust.ai- Gardiner: v In the sales to railroads and ind lie introduction of the par zone syste rfra to the sale of dry white lead at) 6at sold by your competitors? i Trial Examiner Norwood: Bead th (The pending question was read.) ; Trial Examiner Norwood: Youma I No, I don't think we consider lie lead at a price higher than that EyMr. Gardiner: . . ; Q. Why not? ; :. 1. We could hardly be expected tc our product. i S504 Mr. Wright: Your Honor, I ( ask that the last answer he striek no consideration was given, to the que Mgher price. ' ,1 Now, if no consideration was giver certainly it is improper to try to X tts a particular reason for not giv ike matter. . ' . I Trial Examiner Norwood : Well, h :o consideration, and now He is telli 10 consideration. . | Mr. Wright: If no consideration| the matter never came up, and there ; in anyone's mind. _ In other words, the witness is a. that no consideration was ever given' can he have a reason in bis mind, it considered? 1: ' Trial Examiner Norwood: I wii I Proceedings. . h Testimony of Frank H. Hurless. 1851 on of the par and Pacific quote any different prices :sl s quoted to railroads and t prices to railroads and ^ vere likewise quoting such f; >ur competitors were quot- upst _ . and railroad accounts we :ors were doing- pricewise. you make this contact? nen. ibsequent to the adoption you know generally what was so far as the prodneas concerned ? nswer yes, if yon know. tl way I know. ? | f | I i | I | I; Sonor. What profit and at a particular time is of this matter. please, I think it is very ng the matter of pricing etitiori, and it is importhe pricing practices of tot they were making or or, if that is counsel's he pricing practices had it can hardly he estabbe necessary to get into of the company, and we at is going to be endless f profit and loss as havchanging or establishing g f | I | i | f l | s 15 Mr. Gardner: Well, of course the question has not been directed to the adoption of zone systems. The preceding questions dealt with prices so far as railroads and industrials were concerned, and I asked him if he generally knew what the situation was in that field, and the answer was yes. Now I have asked him what that situation in general was. Trial Examiner Norwood: I think we are getting off the track here, I really do. I will sustain the objection. By Mr. Gardiner: Q. In the sales to railroads and industrials subsequent to the introduction of the par zone system, was any thought given to the sale of dry white lead at a price higher than that sold by your competitors ? Trial Examiner Norwood: Bead that question, please. (The pending question was read.) Trial Examiner Norwood: You may answer. A. No, I don't think we considered selling our dry white lead at a price higher than that of our competitors. By Mr. Gardiner: Q. Why not? A. We could hardly be expected to get a premium for our product. 3504 Mr. Wright: Your Honor, I object to that, and I ask that the last answer be stricken. The witness said no consideration was given to the question of selling at a higher price. Now, if no consideration was given to such a question, certainly it is improper to try to bring out that there was a particular reason for not giving consideration to the matter. Trial Examiner Norwood: Well, he said that they gave no consideration, and now he is telling us why they gave no consideration. Mr. Wright: If no consideration was given, obviously the matter never came up, and there was never any reason in anyone's mind. In other words, the witness is already on the record that no consideration was ever given to that question. How can he have a reason in his mind, if the thing was never considered ? Trial Examiner Norwood: I will overrule the objec- 1852 Transcript of Proceedings. tl0n\ I think le may tell us why they did not give serious consideration to selling the competitors. And I thhv t ,p has already told us. ne Did you say you could not get a higher price? The Witness: I said that we could not be expected to get a_ premium for our products. 3505 Trial Examiner Norwood: Yes. By Mr. Gardiner: - Q; Subsequent to the adoption of the two-zone system n the sale of dry white lead, did you ever sell that com A No a PnCe leSS tliaa tIiat Sld by y0Ur eomPetitors ? Q- Why not? toffnr^iur0dlleti^11 andsaJe of dir white lead was not mp ff ble a basi?ess' and we felt that we had to get as much for our product as we possibly could. g TntlVnog ? time that Anaconda Lead Products and International were producing and selling dry white lead A? y ITM COfflpetitio11 with other confpanfes? ' thS' nets?7 WnId yon sa^ as to the extent of competition pany eneoantered on the sale of these prod- Q W^a ITM^* ^as very sti^ competition, to improve Prfoduct or International able in the methods of SSimtTM1 0"gi ittll>r<mmm4s A. To some extent. Q. What improvements were made? A ... AW?e" ^"copntinlugedMour method of chaniral^mpmh tnte^,' 15e'-Te-?1BtWed the leBt me' it from sSPSldW?H.ty ^ "d for tatrng Q T>;a +1.. . it into cars and truck*; material resultinTuMcrST11^ " &e ProduGtin of this sale of that product? S6 W ^our net return from the To some extent. A. No.S that refeeted in any change in your prices ? Q- Why not? 'v y . I Testimony of Frank H. Hut 1. | A. Well, our experience over a period l w constantly had to strive to get lowei I succeeded in cutting the costs in one place | offset in another place; for example, by | materials, supplies and labor. 1 Q. You testified previously that tb Products Company went out of the hus: dry white lead and was succeeded by In When that occurred, was there any tage the pricing system for dry wbiti A. No. . Q. Did anything occur in the trade - early '30's that had a major effect c Products' outlets for its productioi 3507 A. Yes; we encountered inci due principally to the expansion ram pigments. We were forced to go tories that we had not solicited before i to maintain our volume of sales and p Q. You stated that due to this in - you had to go out and sell in an area dnetion area. Was anything done ou ; to secure more sales and to increase: f dry white lead? ' j A. Yes; we decided to go into the ' of white lead in oil. j j Q. Was that the primary reason f< j lead in oil field? ; A. I would say that it was the re Q. What percentage of Anaconda International's dry white lead produl in white lead in oil? ; A Generally about 30 to 35 perj Trial Examiner Norwood: Willy please? (The question was read.) ;: Mr. Gardiner : May I have the aj (The answer was read.) I By Mr. Gardiner: I | Q. Was dry white lead ev< ' 3508 ment by either of your compai A. No. ; Q. Do you know of any agreeing >i of Proceedings. us why they did not give serious 1' he competitors. And I think k iot get a higher priee ? I hat we could not beexpected to f ur products. I >rwood: Yes. I doption of the two-zone system fad, did yon ever sell that com- that sold by your competitors? sale of dry white lead was not md we felt that we had to get ; we possibly could. Anaconda Lead Products and sehing dry white lead, nn other companies? as to the extent of competition red on the sale of these prod- pl^\Vry stiff competition. roduets or InternationaI able return through improvements re made? rSLS!."* dry d in the best menJ P mg lt aDd for taking aad trwcfciftvJ?* Production of this *OWr et return from the y change in your prices? t &p: I- Testimony of Frank E. Eurless. 1853 A. Well, our experience over a period of years was that we constantly had to strive to get lower costs. When we succeeded in cutting the costs in one place, they were usually offset in another place; for example, by increased costs of materials, supplies and labor. Q. You testified previously that the Anaconda Lead Products Company went out of the business of producing dry white lead and was succeeded by International. When that occurred, was there any attempt made to change the pricing system for dry white lead? A. No. Q. Did anything occur in the trade in the late '20's or early '30's that had a major effect on Anaconda Lead Products' outlets for its production of dry white lead? 3507 A. Yes; we encountered increased competition, due principally to the expansion of the use of titan ium pigments. We were forced to go into outlying terri tories that we had not solicited before in order to endeavor to maintain our volume of sales and production. Q. You stated that due to this increased competition you had to go out and sell in an area outside of the pro duction area. Was anything done outside of attempting to secure more sales and to increase your production of dry white lead? A. Yes; we decided to go into the production and sale of white lead in oil. Q. Was that the primary reason for entering the white lead, in oil field? A. I would say that it was the reason. Q. What percentage of Anaconda Lead Products' and International's dry white lead production came to be used in white lead in oil? A. Generally about 30 to 35 percent. Trial Examiner Norwood: Will you read that question, please? (The question was read.) _ Mr. Gardiner: May I have the answer again? (The answer was read.) By Mr, Gardiner: Q. Was dry white lead ever sold tinder consign3508 ment by either of your companies? A. No. Q. Do you know of any agreement on the part of Inter- 1854 Transcript of Proceedings. national with, the other respondents in this proceeding, -who are the National Lead Company, Eagle-Picher Lead Com pany, the Eagle-Picher Sales Company, the Sherwin-Wil liams Company, and the (Hidden Company, for the adoption and maintenance of a system of delivered price quotations of dry white lead? A. No, I do not. Trial Examiner Norwood: Either or any of them? The Witness: Either or any of them. By Mr. Gardiner: Q. Bo yon know of any attempt between International and any or either of the respondents just named in this proceeding for the adoption and maintenance of a plan whereby die United States is divided into zones for the purpose of selling dry white lead? A. No, I do not, Q. Bo you know of any arrangement whereby Inter national sought and secured advice, assistance and coopera tion of the Lead Industries Association, its officers, em ployees and agents along with other respondents in this ease previously mentioned in publishing and using non-competi tive terms and conditions of sale in connection with the sales and offers to sell of dry white lead? 3509 A No, I do not. Q. Bo you know if International ever used the office of the Lead Industries Association with the coopera tion of officials of the same for the purpose of exchanging price factors and information concerning price factors to be used at times by International and other respondents in calculating, determining and announcing their offers to sell dry white lead? A. No, I do not. Q- In .my last question, I referred to respondents, and by that I included all the respondents previously mentioned. Boes that change the answer to the question? A No. Q. Bo you know if International ever agreed to adopt or adopted, maintained and used terms and conditions of sale employed in so-called consignment or agency agree ments under the leadership of respondent National Lead Company for the purpose of preventing dealers from selling dry white lead and from making offers to. sell such products at levels lower than the offers made by respective H Testimony of Frank, \ respondent producers Whose nap )! consignment or ageney agreemen' A No, I do not. Q. Bo you know if Internatid other respondents previously nancy ? to fix or fixed and included i ? 3510 terms and conditions at whi< sold or offered for sale ini i A No, I do not. | Q. When did International h tion of white lead in oil? ; A. During the latter part of Q. Where was this material A At East Chicago, Indian Q. Had it previously Been uf A Yes. ; Q. By what company? j A By the Anaconda Head. H Q. When did Anaconda Le | produce white lead in oil, if yo> ! A In the first part of 19311 I Q. Yon have previously tj ILead Products Company went I factoring dry white lead upon I the acquisition by Intemationa 1 Bid the Anaconda Head dPU i produce white lead in oil upt j A. Yes. ; j Q. Were these activities t the respondent International ^ A Yes. | 3511 Q. Will you describe Company's first method the pricing methods that wei A Well in the Beginning about the white lead in od. m would confine our activities^ industrial accounts. Yv e sent ignidbules.trial accounts, and _*>]j of Cwohnitseelqeuaednitnly,owil eby*>es8u'8c^hMj lead in oil in certain see-tic ipt of Proceedings. espondents in this proceeding, Company, Eagle-Pieher Lead CosSales Company, the Sherwin-WSGUidden Company, for the adophoa stem of delivered price quotation >od: Either or any of them! or any of them. ly attempt between International respondents just named in this tion and maintenance of a plan es is divided into zones for & ite lead! ny arrangement whereby Interd advice, assistance and coopera tes Association, its officers, emith other respondents in this ease ibHshing and using non-coinpeti- of sale in connection with the 11 of dry white lead! if International ever used the s Association with the eoopera^for the purpose of exchanging ion concerning price factors to lational and other respondents and announcing their offers is I referred to respondents, and pendents previously mentioned, to the question? national ever agreed to _ used terms and conditions of xmsignment or agency agreeof respondent National Lead of preventing dealers from om making offers to sell such the offers made by respective Testimony of Prank M. Hurless. 1855 respondent producers whose names were affixed to such consignment or agency agreements! q Bo youlmow if International ever agreed with the other respondents previously named or with aJ [ e ()^ to fix or fixed and included m offers to sell, the prices, 3510 terms and conditions at which said lead pigments sold or offered for sale in commerce! A No. I do not. ,j Q. when did International first commence the produc tion of white lead in oil! A. During the latter part ot 1930. Q A. Q. Where was this material produced! At East Chicago, Indiana. Had it previously been manufactured at that plan . A. Yes. Q. By what company A By the Anaeonda Lead Products Company. Q When did Anaconda Lead Products Company produce white lead in oil, if you know! t ?,,"preWy"eSti4ed tot to Anaconda lik Products Company went ont of to Q. wL tose activities Wren over and carried on by the respondent International at that time! 3511 O Wffl you describe to Anaconda Le^Prodocts Company's first methods to sell wtate lead in ml and industrial accounts. We sent -- consumption nV 1856 Transcript of Proceedings. tributors who were given a defined territory. In other areas, we contacted the dealer trade direct. In the beginning- we did not have any regular pricing system, and we left it pretty much- np to the salesmen to get the most that they could for our unknown product. x x T;e ^me. Anaconda Lead Products Company went into the white lead in oil business, what was vonr position so far as sale of this product was concerned ? n disfriet salesmanager in the midwestern area. Y District salesmanager of what? n white lead> white lead in oil, and zinc oxide Did I understand you to say that initially your sales were limited to the Midwest area, of white lead ^ od? . oci 0 n xn]T sa*es Were nt Ihnited to that area, no. y. Were you in charge of these preliminary activi ties when the Anaconda Lead Products Company was sfertmg to sell white lead in oil? P 7 V&S aret fstfict: salesmanager in the Midwest methorif^iif111 thP}eSms, devices the promotional j ^"te lead k oil ^ aI1 territories. Lead mtn"y famiKar with the Anaconda S in SaleS pr?blems so far as the sale of white ieaa in oil was concerned? O pIS d+Say tbat 1 sParheaded the thing. y - i or that company? e A Yes. tiMs or methods as to the sales prae- aaop`ed b7 ,h" oar wMfeleS't oU tto1TM' " establidled a Pries (or Pound under the price for lb? Sr r I % cent P* agents. ^tional Lead Company's. metoxb atobmttot toe! 011311888 mad8 " P8TM Pricing TM h6*" to S6U to p^ toiler modify! ` 117 ifa<l0nal ^ for a similar com- Testimony of Frank S, Swrless. I 1857 i_ fell we could not expect to get the same price for jgpv got for their product which-had. been very well ; :%{ise(l for many years. The business from the begin-; ips not too -profitable, and consequently we felt we; y not get very far under the National Lead Company ; * aid so we adopted a method of selling at a quarter; jioest under the National Lead Company's price, thatj llional quarter of a cent per pound being considered^byj additional compensation for the dealer for promoting; of our unknown product. j Examiner Norwood: When was that? Afterj took oyer? _ No, that was before International took '< Mat Examiner Norwood: About when was it? ^ j & Witness: I don't recall when it was, but I belief was about 1933. i |Mr. Gardiner: j 5, You have testified you adopted a practice of under ig National's Lead price of a quarter cent per pound fc did you determine what National Lead's price was? j A, It was very easy for us to find out the Nations 34 Lead Company's price by contacting our customer aid prospective customers. | How did you get information from your customers ;:Jm di.d..t.hey. k'new !' Who weTeyour customers? i A. .Well, our customers to a limited extent were dii Sntors in certain areas, but generally they were dealer Q. Were they also dealers of competing products? A The class of trade we termed dealers were both wh Mional called their selling agents and the dealers tb jsrchased from the National Lead Company's sellii gades. j Q. Hid National Lead sell its white lead in oil by a: articular trade name? : ' . . . . . . A Butch Boy. -.1 ' ' . . Was there any resistance in the trade to a low pric rate lead in oil? " , . . A When we began to market white lead in oil, and! TM a considerable period after that, there were sp iwttute products on the market. The substitute produ wildhaye a name that would be similar to the Dutch 3 *ri *}j Jv: script of Proceedings. given a defined territory. Is oba the dealer trade direct. .. ve did not have any regular pricing it pretty much tip to the salesmen to y could for our unknown product, e Anaconda Lead Products Company lead in oil business, what was your of this product was concerned? alesmanager in the midwestern area anager of what? _ !tuJ, white lead in oil, and zinc oxide, id you to say that initially your sales dwest area, of white lead in oil? were not limited to that area, no. _ in charge of these preliminary aetm- aconda Lead Products Company was hite lead in oil? strict salesmanager in the Midwest j beginning, devices the promotional ute lead in oil in all territories, timately familiar with the Anaconda iroblems so far as the sale of white ed? : I spearheaded the thing. y? usly testified as to the sales prae5is material was first manufactured icthods subsequently changed? T was subsequently adopted fey the ts Company? flealers, we established a price for mt was one-quarter of a cent per for the National Lead Compsmy\ ther changes made in yonr pricing me? that time we began to sell wife basis. '. he reason that prompted yon to lead in oil at a quarter cent under ational Lead for a similar Testimony of Frank H. Harless. 1857 A. Well we could not expect to get the same price f our comparatively unknown product that the National Lea Company got for their produet which had been very well advertised for many years. The business from the beg - was not too profitable, and consequently we felt w could not get very far under the National Lead Company S and?o we adopted a method of selling at a. quarter of a cent under the National Lead Company's price, that additional quarter of a cent per pound being considered by us as additional compensation for the dealer for promoting was that, After ^rTOtosT^rttot was before International took ^Trial Examiner Norwood: About when was it? The Witness: I don't recall when it was, but I believe it probably was about 1933. By Mr. Gardiner: , 0. You have testified you adopted a practice of under selling National's Lead price of a quarter cent per pound. How did you determine what National Lead 8 A. It was very easy for us to find out the National 3514 Lead Company's price by contacting our customers and prospective customers. . Q. How did you get information from your customers? How did they know ? Who were your customers ? A. Well, our customers to a limited extent were dis tributors in certain areas, but generally they were dealers. O Were they also dealers of competing products? j L The class of trade we termed dealers were both what National called their selling agents and the dealers that purchased from the National Lead Company s selling agencies.^ National Leaa sell its white lead in oil by any particular trade name? 'Was ther/any resistance in the trade to a low priced *When we began to market white lead in oil, and in fact for a considerable period after that, there were some substitute products on the market. The substitute products would have a name that would he similar to the Dutch Boy 1858 Transcript of Proceedings. ) Testimony o f Frank Jl name, and the containers were sometimes an imitation of the Dutch Boy containers. Any white lead in oil would be sold at a very low price would he viewed with suspision and probably would be considered a substitute of inferior quality. Q. Could you have sold white lead in oil produced by Anaconda Lead Products Company, and subsequently 3515 by International, at a price equal to National Lead's? A, No, I don't think we eould. Q. Could you have sold the material at a price lower than a quarter of a cent a pound below National Lead's prieef A. If we had, we would run into the danger of having it considered a substitute of inferior quality. Mr. Gardiner: May we have a recess, Mr. Examiner? Trial Examiner Norwood: We will take a five minute recess. (A short recess was taken.) Trial Examiner Norwood: Go ahead. By Mr. Gardiner: Q. Did Anaconda Lead Products sell white lead in oil on a zone basis! A. Yes. -9.' ^lea did International first adopt the policy of selling on a zone basis ! fr the latter part of 1936. ^ that International went into lead in oil business ? the ARfiSfLT8 at tim? that International took over Company Properties of the Anaconda Lead Products " b7 these comp"e! 3516 prSl414 lMeaTO " 8eC"ed * ^ ae m' Q- Wouid system was! you describe generally what this zone called zones, W&S divided _ in certain areas three-eighths one half8 tWT zon\one"eigdhh, one quarter, zones m wHVthi 'far^^s and one oent. The freight rates. e higher differentials took higher ! g You just described the par ; Kitaiu fractions, and. then you sai i rtevious fractions refer to fraction l Those fractions that I mentioi ; jut over the par zone price, witl j:.4one I mentioned, which was a jie price. ' Q, You made some reference to I latfreight was charged in addition A, No. _ . g What was the situation on A What I mentioned was that t par sone, for which differentials arried a higher freight rate. _ g That is all white lead in oil fticago, freight allowed ? A That is correct. Q. And these price differ 5 351? zones in which the material v A. That is right. Q, How did you determine w i practice was as to the zone syste material! | A, We contacted customers ant j bind out what our competitors we ;J Q. Was any record made of wh ?iat their practice was ?; 1 A, Well, I believe that occasion; : pit information to that effect in tl may have dropped us letters to te; price-wise hy our competitors. ; Ir. Wright: I object. Your Ho answer be stricken. It was based < fitness ' knowledge. He stated tka . reported these things. It is obvio tin own knowledge from, his answi Trial Examiner Norwood: D fatkind of information. ? ; lie Witness: It was customa write out a report on every call th ner or prospective customer, an would put any information they pi( would be of interest to me as sale aori.viti.es of our competitors. script of Proceedings. Testimony of Frank II. Hurless. 1859 tners were sometimes an. imitation of ' iners. Any white lead in oil would be | mice would be viewed with suspisi | be considered a substitute of inferior I _ __ I e sold white lead in oil produced ty | Products Company, and subsequent | t, at a price equal to National head'd i it think we could. | e sold the material at a price lower i cent a pound below National Lead's f would run into the danger of having 1 nte of inferior quality. | r we have a recess, Mr. Examiner? f rwood: We will take a five minute f 1 taken.) j, rwood: Go ahead. | Lead Products sell white lead in oil 1 mational first adopt the policy of f ! f ir part of 1936. t t tune that International went into I siness? \ time that International took over te of the Anaconda Lead Products I system adopted by these companies ; mte lead in oil? I it because it seemed to be the com- $ describe generally what this zone * ry was divided in certain areas a par zone, one-eighth, one quarter, three-quarters and one cent The *te higher differentials took TngW * Q. Yon just described the par zones as consisting of certain fractions, and then you said one cent. Do those previons fractions refer to fractions of one cent? A. Those fractions that I mentioned are fractions of one cent over the par zone price, with the exception of the last one I mentioned, which was a full cent over the par zone price. Q. You made some reference to freight. Do I understand that freight was charged in addition to these prices? A. No. Q. What was the situation on freight? A. What I mentioned was that the zones other than the par zone, for which differentials were charged, usually carried a higher freight rate. Q. That is all white lead in oil was sold f. o. b. East Chicago, freight allowed? A. That is correct. Q. And these price differentials related to the 3517 zones in which the material was delivered? A. That is right. Q. How did yon determine what your competitor's practice was as to the zone system for the sale of this material? A. We contacted customers and prospective customers to find out what our competitors were doing in this respect. Q. Was any record made of what you determined as to what their practice was? A. Well, I believe that occasionally our salesmen would put information to that effect in their sales reports. They may have dropped us letters to tell us what was going on price-wise by our competitors. Mr. Wright: I object. Your Honor, and move that that answer be stricken. It was based on belief rather than the witness' knowledge. He stated that the salesmen may have reported these thmgs. It is obviously not a matter within Ms own knowledge from his answer. Trial Examiner Norwood: Did they usually report that kind of information? The Witness: It was customary for our salesmen to write out a report on every call that they made on a custo mer or prospective customer, and in these reports they would put any information they picked up that they thought would he of interest to me as salesmanager regarding the activities of our competitors. 1860 Transcript of Proceedings. Testimony of Frank H. Surles 3518 Trial Examiner Norwood: Do you know that that & Wright: Subject to that qualificati information came to you in that way? The Witness: Yes, I do. Trial Examiner Norwood: Objection overruled. By Mr. Gardiner: Q. Did you keep a map outlining these zone systems? 3 Trial Examiner Norwood: It is so recen J (The document referred to, heretofore ma 5tion RESPONDENT'S EXHIBIT 193, - ivMider.n'cGe.')ardiner: I ask that this be marke A. Yes. Q- Was this map prepared at the suggestion or request or instigation of the representatives of any of the respon dents heretofore named in this case? Saihit Nq v 194 for identification. m (The document referred to was marke Mihit,T94: for identification.) . A- No. Q. Kid you ever discuss with any representatives or official of any of the respondents heretofore named in this proceeding the use of such a map as the price pattern or the use of sueh a map in the sale of white lead in oil? A. No, I did not. Mr. Gardiner: I ask that this he marked Respondent's Exhibit for Identification No. 193. g5rBy5;Mr.i'!Gardiner: ; Q. lahow you Respondent's Exhibit h lificatiofi and ask if you have seen this doc A. : Yes,- I have .seen these figures bef Q. What do you know about their pr< A.- .The-, figures showing the sale of wh listed were supplied by the (The document referred to was marked Respondent's Exhibit No. 193 for identification.) :Ry Mr. Gardiner: you Respondent's Exhibit for Identification * 3 feu if yon have seen this document before ? ' A. Yes, I have seen these figures before. i Doyou know anything about ththeeirir preparation? A. They were *pre^pared u__n_d_e__r my sut pervision. Who requested that you have these figures ATsshoec.iafitgLuorme,s sbowing th. e sales of white le nstiona^|for.: the years listed were taken in o iba?ss.ales department at East Chicagc Q- Were you requested to prepare A Yes, I was. . Q-: ^YrWhqm? A. our legal counsel. ''Qt'What/was the basis on which t counsel. - t was the basis on which these figures were L %1^6 response.V ask you that? \ `q x 5|ay from what sources were t *es showing the total production of white )_phited States for the years listed were supplied by the Lead Industries Assoei- jfcg|5S^res Showing the sale of ^ that the Umted Btates^forj:^ |nd ,, - ^he production of white lead in oil ro years listed were taken from the f*501331^ department at East Chicago, to offer at ^s time in "' bit Nq. l93, subject to the same aihxbifs have been submitted. * *& && SSSKSatt sa^equ.imca, **^ftave been accepted. . tr!1:.''i-: * V " vVAb^i.-; nscript of Proceedings. ner Norwood: Do yon know that that .me to you in that way? ;s, I do. Norwood: Objection overruled. a map outlining these zone systems! |Tf, prepared at the suggestion or request I representatives of any of the respoa- * ted in this ease ? | discuss with any representatives or |- respondents heretofore named in this | f such a map as the price pattern or f in the sale of white lead in oil? < tsk that this be marked Respondent's * ttion No. 193. | [erred to was marked Respondent's I identification.) 1 3pondent*s Exhibit for Identification have seen, this document before? n these figures before, ow anything abont their preparation! ! prepared under my supervision. sted that you have these figures al basis on which these figures were wing die total production of white the years listed were by the Lead Industries Assoei- production of white lead in oil f. listed were taken from the ong department at East Chicago* tihis time in subject to the same exhibits have been submitted. Testimony of Frank H. ELurless. 1861 Kr. Wright: Subject to that qualification, I have no objection. . Trial Examiner Norwood: It is so received. (The document referred to, heretofore marked for identi fication RESPONDENT'S EXHIBIT 193, was received in evidence.) , ._ , Sir. Gardiner: I ask that this be marked Respondent s Exhibit No. 194 for identification. (The document referred to was marked Respondent's Exhibit 194 for identification.) 3520 By Mr. Gardiner: Q. I show you Respondent's Exhibit No. 194 for Iden tification and ask if yon have seen this document before? A. Yes, I have seen these figures before. Q. What do you know abont their preparation? A. The figures showing the sale of white lead in oil for the years listed were supplied by the Lead Industries Association. . Tt The figures showing the sales of white lead m oil by Inter national for the years listed were taken from, the records in our sales department at East Chicago, Indiana. Q. Were you requested to prepare these figures? A. Yes, I was. Q. By whom? A. By our legal counsel Q. What was the basis on which these figures were calculated? A. (No response.) Q. Did I ask you that? A. Yes. n. xi Q. I say, from what sources were these figures taheni A The figures showing the sale of lead in oil, total sales, that is, in the United States for the years listed were taken from figures supplied by the Lead Industries Association. Those figures showing the sale of white lead in oil 3521 by International for the years listed were taken, from the records in our sales department at East Chicago, Indiana. ,, . . ., . x Mr. Gardiner: I should like to offer into evidence^at this time Respondent's Exhibit marked for identification No. 194 subject to the same qualifications as the previous exbibits have been accepted. 1862 Transcript of Proceedings. Mr. Wright: I have no objection to its being received subject to those qualifications. Trial Examiner Norwood: It is so received. (The document referred to, heretofore marked for identi fication RESPONDENT'S EXHIBIT No. 194, was received m evidence.) By Mr. Gardiner: Q. In what manner was white lead in oil sold? That is how was it packaged? ' A, In metal containers. Q. What were the sizes of these containers ? A. 100 pounds, 50,20,12 and y2, 5, and 1. Q. Did these containers carry a different price? A. Yes. - : d ask that this document be marked for "^tiheatmn Respondent's Exhibit 195. ThVVk u i re?ltre.d to was marked Respondent's i&nbit 195 for identification.) By Mr. Gardiner: . 3522 I show yon Respondent's Exhibit marked No. 195 before?1*1(lentlficatlon and ask yon if yon have seen that A. Yes, I have seen these figures before. aration?0 yU ow ari7thmg about this document's prep- G* wwS prePared TMder my supervision, calculated? V&S ^ ^as3s nPon 'which these figures were remW^lrit !?r, 10, PTMi is? was taken from our 'Anf^batlm7mLrPsJ3S effcct ^ of ae dat<!' ing the total frJSvfP + / ^ds was arrived at by tak- W the mSLr l-T Period aad dividing it net was the mill net TMdssIllPped during that period. The Norwood: Does this relate entirely to leadkoil&leir: TeS' ToUr H4r. this relates to wMte By Mr. Gardiner: AtStJSrfw ,3ocmieilt' Testimony of Frank S. SuHess. d Why was the year 1912 selected? I As I recall it, that was what the sales depa jjlurl as salesmanager, considered , mal year prior to the end of the Mst g; Mr. Gardiner: I should like to s * % evidence Respondent's ExbiM m*** 0(4 purposes No. 195, subject to the "gained with regard to the -previously suta fe Wright: Your Honor, this is a jifijej , in that it was prepared at *xjpg^ rfs witness for the purpose of bang?*erj -liter. It purports to show that the yn<& sitbetween the par zone and theetherzones, j imtg the year 1942, were more than offset by t $15 that were involved in these _ shipments, rfj, this does to the heart of the issue, _ jthas been improperly identified to make it. ;l this point, because we do not know what refi rjiiin making this; nor do we know me meanj ierecords were processed to arrive at these ave tee has been no basis shown here to the eite otffls of working it ont and making this piece <3 Aiee which is thought to be admissible arej &nature in which it could be admitted as eviq Ms which it purports to show. . .; iw, this cannot exist outside of the origin ?oI must strenuously object to its admission. | TOild object to its being admitted subject to i of documents later to me, because I think it H improper method of handling this matteij burden on Commission's counsel of going! records of this company for the year 1942 to asf Is thing was prepared and whether the reco ifler all, are the evidence, have been accurate ktbis piece of evidence. Ir. Gardiner: If your Honor please, so fat eiikuce is concerned, it is true, as brought oi (lamination, that this was prepared at the Miinsel for the respondent. These figures wei Im records which were or are available, or c (Salable;. They are no-t available here at this p They represent averages which were arrive; iript of Proceedings. Testimony of Frank E. Hurless. 1863 [caSoiTsbjeCti0n t0 itS ***** reee^ wood: It is so received. rsmS5,n^W,0'ite f i. b EXHIBIT No. 194, was receiveil " was white lead in oil sold? Thai is lers. zes of these containers ? o, 12 and y2} 5, and 1. lers carry a different price? rtt W5ment 66 marMfc atiou!) WaS marked Eespondenfc's t U**6?''8 E*hibit marked No. 3* "* ask yon if yon have seen iS hese figures before, ng abont this document's prep- mder my supervision. 18 upon wilieh these figures fnSQwd was t*en from LOG nT V*1 effect M of .the dale. *i: Dm" W* relate entirely to "r Bonr . this relates to wMie docmaeatf Q. "Why was the year 1942 selected? A, As I recall it, that was what the sales department, or rather I as salesmanager, considered the last nearly nor mal year prior to the end of the last war. 3523 Mr. G-ardiner: I should like to submit at this time in evidence Respondent's Exhibit marked for identi fication purposes No. 195, subject to the same qualifications as obtained with regard to the previously submitted ex hibits. Mr. Wright: Your Honor, this is a piece of made evidence, in that it was prepared at the request of eounsel by this witness for the purpose of being offered in this matter. It purports to show that the price differences made between the par zone and the other zones, apparently, during the year 1942, were more than offset by the freight costs that were involved in these shipments. In oiher words, this does to the heart of the issue. It has been improperly identified to make it admissible at this point, because we do not know what records were used in making this; nor do we know the means by which the records were processed to arrive at these averages. There has been no basis shown here to the effect that the means of working it out and making this piece of artificial evidence which is thought to he admissible are reliable, or the nature in which it could he admitted as evidence of the facts which it purports to show. Now, this cannot exist outside of the original records. So I must strenuously object to its admission. And I also would objeet to its being admitted subject to submission of documents later to me, because I think it is a highly 3524 improper method of handling this matter to put the burden on Commission's counsel of going through all records of this company for the year 1942 to ascertain how this thing was prepared and whether the records, which, after all, are the evidence, have been accurately reflected in this piece of evidence. _ Mr. Gardiner: If your Honor please, so far as making evidence is concerned, it is true, as brought out on direct examination, that this was prepared at the request of eounsel for the respondent. These figures were prepared from records which were or are available, or can be made available. They are not available here at this present time. They represent averages which were arrived at, accord- J 1864 Transcript of Proceedings. m Testimony of Frank TJ. Hurl mg to the witness who can elaborate as to the detail which was used in their preparation. There is no question bat what this represents a sum. mary, and that should be the value in it showing in a simple manner the difference between the net realized in these, various zones with relation to the zone price, and I submitted it subject to the same qualifications as these others were submitted, which was that complete records should be submitted to counsel for check. Mr. Wright: I submit that this witness has not testified that these things were made up from any record which would he admissible in this case. He said we took 3525 average freight costs. Now, what did he take average freight costs from? We have no idea. Trial Examiner Norwood: Where did you get these freight costs? ' The Witness: We took the freight charges for each zone for the period specified from the records in our accounting department, and divided that by the pounds-- Trial Examiner Norwood:. Was that the actual freight charges on the shipments actually made? The Witness : Yes, sir. Trial Examiner Norwood: There wasn't any average tor a zone, was there? : ^ was an average for a zone inasmuch as we mvided the total freight charges actually paid for that period by the total number of pounds shipped into that zone during that period. . Mr. Wright:. Your Honor, if we are going to get into the question of further identification of this, I would like Pretaiary cross-examination. MrmwJSr6nN?^?0d : ^s, gq right, ahead. : k; Plainly on the basis of the record as it SiJwiSjT18 ^adiais1slble because the records of the tinier i+Vo do not raake. something admissible ^ irK f Jee^rd sufficiently reliable 3526 thTrt!v? d b-6 adl?ltted ia evidence here. cover the snipe Mr. Huriess, does this purport to Krimu! forJhe eTltire ^ar of 1942? Sf^^^Wes, it does. . your sMe^hich^fprT deterinine the proportion ot ^ par zone and the varions I The Witness: We determined that by |1 tie shipments. 'I Mr. Wright: Now, just what meehan rjl j o b go through, what records did you c< J means: did you use? I The Witness: I had the records for the Mr;.Wright: "What records were they? 1 The Witness: The records of the shij kept in our accounting department. Mr. Wright: Were they invoices? I The Witness: This information was ta. j sndfreight bills, I Mr. Wright: You mean this documen J ap directly from invoices ? # | The Witness: And freight hills. 4 Mr. Wright: And original freight bill |. The Witness: Or copies of the origin j don't know that we retained the ) 3527 bill. ; i Trial Examiner Norwood -. It re] I age of the freight actually paid, does it? "I The Witness: That is right. { Mr. Wright: Now, I notice you hay | top here "East Chicago" with a net of . ^ Hue there. You did not take into accounl S ihatiwighthave been involved in deliver? \ Thq Witness: Well, any deliveries to ' 1 the city limits of East Chicago would ] shipped by public carrier. Such deliv ' likely "be made by our own truck. . Mr. Wrigbt: By your own truck, bu I in either event? The Witness: Yes. . ' Mr. Wright: So that your net corn be reduced by tbe cost of that cartage? The Witness: That is right. Mr. Wright: Do you know what tha ' 1942 on an average basis? The Witness: No, I don't. 1 Mr. Wright: As I understand it fron sales of white lead in oil during 1942 a tons? ._ The Witness: That is correct. script of Proceedings. o can elaborate as to the detaS wiad paration. on but what this represents a sunt ild be the value in it showing is a ifference between the net realized, a nth relation to the zone price, and I to the same qualifications as these d, which was that complete records o counsel for check. ^ tnit that this witness has not testfel e made up from any record wMck ible in this case. He said we teeifc osts. Now, what did he take average n? We have no idea, rwood: Where did yoa get these took the freight charges for esct specified from the records in ear , and divided that by the pound-- vood: Was that the actual freight its actually made t ir. vood: There wasn't any average an average for a zone inasmuch as tght charges actually paid for that nber of pounds shipped into that lonor, if we are going to get into identification of this, I would like t cross-examination, sod: Yes, go right ahead. v ly on the basis of the record as it eible, because the records flfA o not make something admissible eeord which is sufficiently reMAble aitted in evidence here. Norwood: Go ahead. ' Harless, does this purport Ip itiie year of 1942f ' does. ... you determine the proportion * mu the par zone and the varipas Testimony of Frank H. Hurless. 1865 The Witness: We determined that by determination of Wright: Now, just what mechanical process did you go through, what records did you consult, and what means did you use? ,, 1Cwo The Witness: I had the records for the year 1942-- Mr Wright: What records were they ? The Witness: The records ef the shipments that were kept ip onr amounting department. Mr Wright: Were they invoices" .. The Witness: This information was taken from invoice ^M^Wright JS* You mean this document here was made up directly from invoices ? The Witness: And freight bills. Mr. Wright: And original freightbills? .... T The Witness: Or copies of the original freight hiU - don't know that we retained the original freight 3527 ^rial Examiner Norwood: It represents the aver age of the freight actually paid, does it? The Witness: That is right. . . +up Mr Wright: Now, I notice you have included 111 top here "last Chicago" with a net of 1M0 Ike there. Ton did not take into account 0"''"" at yonr mimm in either event? Jfe W^SV si &at your net correspondingly world he reduced by the cost of that cartage? M? Wright? ' Do^you know what that cost might he m 1942 on an average basis ? !>..J MThre WWritignehst:s: ANnoI, uInddeornstand it f-rom TEHxmxhDibixit 194, yyour safe ofwhite lead in ofl during MS amonptad to IfiW tons ? ., The Witness: That is correct. 1866 Transcript of Proceedings. 3528 Mr. Wright: You had the original invoices for that entire 1,813.9 tons? __ The Witness: We had copies of the originals. ' Mr, Wright: Or copies of the originals, and you segre gated them all by the geographical zones? The Witness: That is correct. . Mr. Wright: Does it appear on the invoice as to what zone the shipment was to ? __ The Witness: No, it did not appear on the invoices, marked, for example, one-eighth zone or one-quarter zone, but that could be determined by the price. '. Mr. Wright: Now, did all of these invoices include just 100 pound containers? The Witness: No. In exhibit 195 we gave the price per 100 pound keg to indicate the base price to the par and other zones, but the total shipment would be made up of the total amount of lead in oil shipped, which would be in 100 pound containers, and containers of other sizes. Mr. Wright: In other words, these invoices from which you made it up might not have had 10O pound kegs ? It might have had 12-% pound cans, or 5 pound eans, or 1 pound cans? The Witness: That is right. Mr. Wright: So that your net in this column here was not derived from those invoices in any way. Your net 3529 just shows what would have been the case had this invoice been for hundred pound containers? The Witness: Will you repeat that question, please? Mr. Wright: The column under "net" in this exhibit that we are talking about now shows the net which would have applied had that shipment been in hundred pound kegs? The Witness: Yes. . Mr. Wright: But it might not have been in one hundred pound kegs? The Witness: That is correct. ' Mr. Wright: Well, now, did. you separate these invoices by geographical location? The Witness: Yes. ^10 did that, what employees did that? ine Witness: A clerk in our accounting department who Handled the accounting matters in connection with the wmte lead in oil sales. Mir. Wright: Now, how did you keep your freight I Testimony of Frank S. Hu -! ii records from which you got this average Ste? ; , The Witness: Well, as I remember ; ledger in which we entered the compk i freight hill, and then a copy of the freig 1 the accounting department at Bast ? P Mr, Wright: Now, from what figures? Was it from the ledger o : if ; The Witness -. I don't know whether t ltdger ox from the freight hill. _ _ Mr. Wright: Would those freight bi invoices which showed shipments? i The Witness: We could locate the mold cover the freight charges for eac : Mr. Wright: Could you tell the invoie from the freight bill or from the entry in : The Witness: Yes, we could do that r Mr. Wright: Well, was that done ii ; The Witness: It is my understand!: i Mir. Wright: Do you know yourself f The Witness; Well, I did not do instructions were to carry out the wor] Mr. Wright: Well, just what were ; Caa you recall exactly how you instru to make this up? The Witness: I don't know that I ht in general the instructions were amount of lead in oil for this period 1 each zone, and to determine the i : 3S31 by dividing the cost of the freigl lead in oil shipped. ; Mr. Wright: Yon did not tell them; that done, hut just told them to do it. i The Witness: That is correct. I] would go to the proper records and maj from them. Mr. Wright: Do you know whether records are still preserved in the form of invoices and freight bills ? The Witness: When, we closed on it is my understanding that such reco j Perth Amboy, New Jersey, for storaj liaBii.' npt of Proceedings. Sfou had the original invoices for ) tons? ad copies of the originals, ies of the originals, and yon segreeographical zones! is correct t appear on the invoice as to what to? t did not appear on the invoices, le-eighth zone or one-quarter mm, lined by the price. _ did all of these invoices inchade ers? 1 exhibit 195 we gave the price per ate the base price to the par an! al shipment would be made up d , in oil shipped, which would he.ha nd containers of other sizes, r words, these invoices from not have had 100 pound " _ ound cans, or 5 pound eans* or 1 is right. your net in this eoluma here was use invoices in any way. onld have been the case had adred pound containers? m repeat that question, _ amn under ``net1' in tMs t now shows the net which wotf ihipment been in hundred pasl ight not have been in one hundred correct. w, did yon separate these inveieses that, what employees did that? a onr accounting- department who matters in connection with ow did yon keep your frei Testimony of Frank H. Hurless. 1867 records from which you got this average 100 pound freight rate? The Witness: Well, as I remember it, we had a large ledger in which we entered the complete data from the freight bill, and then a copy of the freight bill was filed in the accounting department at East Chicago, Indiana. 35) Mr. Wright: Now, from what did you get these figures ? Was it from the ledger or from the freight bill? . The Witness: I don't know whether they came from the ledger or from the freight bill. Mr. Wright: Wonld those freight bills he keyed to the invoices which showed shipments? Ole Witness: We eonld locate the freight bill that wonld cover the freight charges for each invoice. Mr. Wright: Could yon tell the invoice that was involved from the freight biH or from the entry in the ledger? The Witness: Yes, we could do that without any trouble. Mr. Wright: Well, was that done in preparing this? The Witness: It is my understanding that it was. Mr. Wright: Do you know yourself that it was? The Witness: Well, I did not do it myself, but the instructions were to carry out the work along that line. Mr. Wright: Well, just what were your instructions? Can you recall exactly how you instructed the employees to make this up ? The Witness: I don't know that I can recall exactly, hut in general the instructions were to determine the amount of lead in oil for this period that was shipped to each zone, and to determine the average freight cost 3531 by dividing the cost of the freight by the pounds of lead in oil shipped. Mr. Wright: You did not tell them just how you wanted that done, but just told them to do it. Is that correct? The Witness: That is correct. I assumed that they would go to the proper records and make the proper entries from them. Mr. Wright: Do you know whether or not all of these records are still preserved in the form of invoices or copies of invoices and freight bills? The Witness: When we dosed onr plant during 1946, it is my understanding that such records were shipped to Perth Amboy, New Jersey, for storage. f i7i i 4 3 !'! 1868 Transcript of Proceedings. Mr. Wright: Are yon able to state whether they are in existence at this time and can he made available ? The Witness: I cannot definitely state that, because I had nothing to do with the packing and shipping of the records. Mr. Wright: Your Honor, I want to renew my objection now on two additional grounds: One, that this gentleman is not acquainted with the details in which these figures were compiled, hut turned the job over to subordinates, and this can only be properly identified by the people who actually did the work, since he only assigned the task in a general way; and for the additional reason that the 3532 basic data may no longer he available. According to this witness, he cannot state whether it is or whether it is not. Mr. G-ardiner: If your Honor please, this was sub mitted with the same qualifications as these previous exhibits, which was, as I understand Your Honor's ruling, that they would be stricken-- Trial Examiner Norwood: I will sustain the objection for the time being until it appears that it is possible for the basic data to be made available. Inasmuch as those are invoices, and just one year's invoices, that would not be a very large book. I should think counsel could bring those in. Mr. Wright: It covers almost 2,000 tons of this ma terial. Trial Examiner Norwood: Well, tons--you could put many tons on one little invoice, you know. Mr. Wright: Furthermore, there' has been no direct evi dence on the part of the respondent, who has the burden of supporting this document, showing the technique and means by which it was made up. This witness does not know what records were used to make any of this up, the freight re cord. Trial Examiner Norwood: That point is well taken also, but it should appear here that there are basie data which can be produced, and also that somebody who brings them ,, can explain the thing to us. It is not in satisfactory dodd condition now, anyway, hut counsel may present that _ again when he meets those objections: I will sustain the objection for the time being That is exhibit 195, is it? Mr. Wright: Yes. .A Testimony of FranJr, R. Rw. I By Hr. Gardiner: :l Q, Was white lead in oil ever sold b i Products or International on consignme ; A. No. I Q. Were there any exceptions to th A. One. Q. What was that exception ? A. The State of Wisconsin. Q. Why was consignment contract us Wisconsin? < A. It is my understanding that the co; was used in the State of "Wisconsin becar : State of Wisconsin provide that in cae consigned stock cannot be returned to ft .y there is a written agreement to eover it ' Mr. Wright: I move the answer be st the witness'understanding. He is not c ; as to the reason for the company poli a knowledge that they may he required I hearsay. 'i Trial Examiner Norwood : He can ;i 3534 Hid you establish that policy < ] it? Is it within your province to del j The Witness; That policy was detei f counsel. Mr. Wright: He testified only to Your Honor. I think a re-examination < show that he did not state of his own Trial Examiner Norwood: That wo understanding, if he made the policy, considerations. . _ But I think probably your ohj ection : By Mr. Gardiner: , ! . Q. Were you ever instructed to p contracts for the use of sale of mater: A. Yes. ; Q. Were you ever instructed to p contracts for the sale of white lead States? . A. No. _ i Q. At the time yon received thes you told the reason why yon were consignment contracts for Wisconsin? I . -v ^ : ;' f Proceedings, ble to state whether they are can be made available? "finitely state that, because I packing and shipping of the I want to renew my objection ds: One, that this gentleman letails in which these figures be job over to subordinates, ' identified by the people who e only assigned the task im a le additional reason that the aper be available. According mot state whether it is or [onor please, this was aabfications as these previous rstand Your Honoris ruling, I will sustain the _ ars that it is possible for the ble. Inasmuch as those are invoices, that would not be think counsel could brine lost 2,000 tons of thus xna- Well, tons--you could put yon know. here has been no direct evi dent, who has the burden of mg the technique and means witness does not know what r of this up, the freight re hat point is well taken also, there are basic data which somebody who brings them is. It is not in satisfactory it counsel may present e objections. I will sustains . That is exhibit 195, is it? Testimony of Frank H. Hurless, 1869 By Mr. Gardiner: Q, Was white lead in oil ever sold by Anaconda Lead Products or International on consignment contract? A. No. Q. Were there any exceptions to this practice? A One. Q. What was that exception? A, The State of Wisconsin. Q, Why was consignment contract used in the State of Wisconsin? A It is my understanding that the consignment contract was used in the State of Wisconsin because the laws of the State of Wisconsin provide that in case of insolvency, a consigned stock cannot be returned to the consignor unless there is a written agreement to cover it. Mr. Wright: I move the answer be stricken. It concerns the witness' understanding. He is not competent to testify ae to the reason for the company policy on the basis of knowledge that they may be required from others. It is hearsay. Trial Examiner Norwood: He can give ns his reason. 3534 Did you establish that policy or fail to establish it? Is it within your province to determine that policy ? The Witness: That policy was determined by our legal counsel. Mr. Wright: He testified only to his understanding, Your Honor. I think a re-examination of the answer would show that he did not state of his own knowledge. Trial Examiner Norwood: That would be all right, his understanding, if he made the policy. He can tell us the considerations. Bnt I think probably your objection should be sustained. By Mr. Gardiner: Q. Were you ever instructed to prepare consignment contracts for the use of sale of materials in Wisconsin? A Yes. Q. Were you ever instructed to prepare consignment contracts for the sale of white lead in oil in any other States? A No. Q. At the time you received these instructions, were you told the reason why you were required to prepare consignment contracts for Wisconsin? 1870 Transcript of Proceedings. A. Yes. Q. "What was the reason? A.. The reason was the laws of the State of Wis3535 cousin, provide that in ease of insolvency, the con signed stock cannot he returned to the consignor unless there is a written agreement to cover it. Q. Did either Anaconda Lead Products or International ever use any type of consignment arrangement in other States for the sale of white lead in oil ? A. They used the consignment arrangement. . Q- When was that arrangement first used, and describe its operation. . . A I cannot give the date when it was first used, but I believe that it probably was about 1932. An order for shipment on consignment would be taken by our salesmen and forwarded to the main office at East Chicago, or would be sent indirect to that office by the customer. The shipment would be made and invoiced on memo billing. About the 20th or 25th of every month we would send a form to the customer to be filled out. On it the customer would insert the amount of consigned stock on. hand on the 25th or the preceding month, the amount of lead in oil received since that date, and the amount on hand on the present date, the difference being tbe amount that had been sold from the consigned stock. Then the customer would be invoiced for that amount at current prices. ,,,,,, P yu 3536 method of sale? who devised that procedure, or A. I mainly devised it, with the assistance of mem- -YTr Ur ,^es department and accounting department f arrangement you have just desorbed put into etteet at the instigation of, or through the agreement with, any of the respondents heretofore named, with any respondents?111 ffi<aal rePresentative of any one of these A. No. ` .. . , much-business, did the Anaconda Lead Products fou50 *%sales/?om consigned stocks accounts 0 APw cena ofTour sales of white lead in oil. Q- Did Anaconda Lead Products or International ever Testimony of Frank II. Hurle supply dealers with price cards stowing r white lead in oil? A Yes. Q. Why were these -cards given to deal A. Those cards were informative and c tising value for us. Q. Did Anaconda Lead Products or In' require dealers to resell white lead in oil listed on snch cards? A. No. Q. Did Anaconda Lead Products 3537 ever have any arrangements with dea to the terms and conditions of resale materials resold? A Will you. repeat that question, plm Q. Did Anaconda Lead Products or Ir kve any arrangements or any agreeme: with respect to the terms and conditions of priees of the materials as such, to be resol A. No. __ Q. Did International, in selling and dry white, lead and lead in oil in comme dealers for resale, require its customer products at prices and terms of sale fixer 1 and published, by it? A. No. . Q, Will you state again how many yes connected with the International Smelting p'any? A. 25 years. . Q. What relationship does that cor respondent Anaconda Copper Mining Cc A. It is a subsidiary, Q. Are you familiar generally with thr International Smelting & Refining Con tke United States ? A. I believe that I am. Q. Are you familiar generally v 3538 of the Anaconda Copper Mining < out the United States? A. I believe so. Q. Do you know whether tire Anaeor Company has ever engaged in the prod load pigments? Proceedings. le laws of th& State of Wis?ase of insolvency, the eon- urned to the consignor unless 0 cover it. nd Products or International ment arrangement in other din oil? cent arrangement, nent first used., and describe j j /hen it was first used, but I tout 1932. onsignment would be taken d to the main office at East lireet to that office by the 1 be made and invoiced on I j f i | my month we would send a ed ont. On it the customer signed stock on hand on the the amount of lead in oil he amount o e l hand on the ?ing the amount that had oek. invoiced, for that amount Sevised that procedure* or | vith the assistance of memad accounting department m have just descibed put or through the agreement sretofore named, with any stive of any one of these j f f f 1 I e Anaconda Lead Products this consignment arrangeoil? consigned stocks accounts afes of white lead in oil or International ever i I I f j I I I Testimony of Frank H. Hurless. 1871 supply dealers with price cards showing retail prices for white lead in oil? A. Tes. Q. Why were these cards given to dealers? A. Those cards were informative and contained adver tising value for us. Q. Did. Anaconda Lead Products or International ever require dealers to resell white lead in oil at these prices listed on such cards? A. Eo. Q- Did Anaconda Lead Products or International 3537 ever have any arrangements with dealers with respect to the terras and conditions of resale or the prices of materials resold? A. "Will you repeat that question, please? Q. Did Anaconda Lead Products or International ever have any arrangements or any agreements with dealers with respect to the terms and conditions of the resale or the prices of the materials as sueh to be resold? A. m. Q. Did International, in selling and offering to sell dry white lead and lead in oil in commerce to agents or dealers for resale, require its customers to resell such products at prices and terms of sale fixed and determined and published by it? A. Eo. Q. Will you state again how many years yon have been connected with the International Smelting & Defining Com pany? A. 25 years. Q. What relationship does that company have with respondent Anaconda Copper Mining Company? A. It is a subsidiary. Q. Are you familiar generally with the operations of the International Smelting & Defining Company throughout the United States? A. I believe that I am. __ Q. Are you familiar generally with the operations 3538 of the Anaconda Copper Mining Company through out the United States? A- I believe so. _, Q. Do yon know whether the Anaconda Copper Mining Company has ever engaged in the production and sale of lead pigments? 1872 Transcript of Proceedings. A. It has not. Q. Do yon know whether the Anaconda Copper Mining Company ever gave any directions throngh its officers or agents to the Anaconda Lead Products Company or to the International Smelting & Refining Company as to the operations of those companies or to the prices to be charged for lead pigments and the terms or conditions under which they were to be sold? A. No, I do not. Q. Do you know if the Anaconda Copper Mining Com pany ever exercised any control over Anaconda Lead Pro ducts or International beyond that which a stockholder would ordinarily be expected to exert? A No, I do not. Q. In advertising their products, did Anaconda Lead Products and International use a common name and trade mark? A. Yes. Q. What was it? A It was the Anaconda trade-mark. ,* 7011 know if there was any arrangement with the Anaconda Copper Mining Company for such use? A I do not know of it. 3539 Q. Why was that particular trade-mark used? 1 , . A Well, we used it to help us to sell our white lead in on, which was a comparatively unknown product at that time. Q. Do you know of any agreement on the part of Inter national with the National Lead Company, the EaglePicher Lead Company, the Eagle-Picher Sales Company, e Lherwm-Williams Company, or the (Hidden Company tor tne adoption and maintenance of a system of delivered price quotations for white lead in oil? A No, I do not. Q. Do you know of any agreement between Laterna- any of7 odler respondents in this proceeding wjTStt re ^a+iedrrf-^ l}-% adoPtion and maintenance of a plan whereby the United States is divided into zones for the purpose of selling white lead in oil ? A No, I do not. ,,9' 5 7 of an^ arrangement whereby Inter- sCHfe.d adviee> assistance and coopera tion of the Lead Industries Association, its officers, em ployees and agents, along with the other respondents | Testimony of Frank H. E 4 jsretoforc mentioned, or any one of th s ng, publishing and using non-competiti I tons of sale in connection with the sal of white lead in oil? ] A. No, I do not. | Q. Do you know if Internati 3 3540 office of the Lead Industries A i cooperation of the officials of the s l of exchanging price factors and inf< price factors to he used at times by t] | fee other respondents heretofore name \ in calculating, determining and axmou i sell white lead in oil? i A. No, I do not. Q. Do you. know if International i ; ot adopted, maintained and used ten ; sale embodied in the so-called con I agreements under the leadership of | Lead Company, for the purpose of pr< I soiling white lead in oil and from mak | products at levels lower than the J respective respondent producers hen I names were affixed to such consigner fi meats? '|| A No, I do not. I Mr. Wright: Your Honor I am w this witness will testify that he does r j tion. of this complaint, if it will save ; | Trial Examiner Norwood: Off i (There was a discussion off the n Trial Examiner Norwood: On 1 : overruled. ; By Mr. Gardiner: ' 3511 Q. Mr. Hurless, you have : a series of questions about y existence of agreements between other respondents in this case cove tribution of dry white lead. I have ; the same questions with relation to Is your answer the same as to the have previously been asked as to < j Mr. Wright: Yon mean, with re Proceedings. le Anaconda Copper Mining tions through its officers or Products Company or to the fining Company as to the >r to the prices to be charged is or conditions under 'which conda Copper Mining Com1 over Anaconda Lead ProL that which a stockholder o exert? >ducts, did Anaconda Lead a common name and trade- ide-mark. ^as any arrangement with Company for such use? icular trade-mark used? > help ns to sell our white itively unknown product at ement on the part of Intersad Company, the Eagjegle-Pieher Sales Company, , or the G-lidden Company ee of a system of delivered in oil ? Teement between Interna'Ondents in this proceeding ion and maintenance of a s divided into zones for fee il? *angement whereby Interee, assistance and cooperasociation, its officers, emh the other respondents Testimony of Frank H. Hurless. 1873 heretofore mentioned, or any one of them, in fixing, adopt ing, publishing and nsing non-competitive terms and condi tions of sale in connection with the sales and offers to sell of white lead in oil? A. No, I do not. Q. Do you know if International ever used the 3540 office of the Lead Industries Association with the cooperation of the officials of the same for the purpose of exchanging price factors and information concerning price factors to he used at times by the International and the other respondents heretofore named or any one of them in calculating, determining and announcing their offers to sell white lead in oil? A. No, I do not. Q. Do you know if International ever agreed to adopt or adopted, maintained and used terms and conditions of sale embodied in the so-called consignment or agency agreements under the leadership of respondent, National Lead Company, for the purpose of preventing dealers from selling white lead in oil and from making offers to sell such products at levels lower than the offers made by the respective respondent producers heretofore named, whose names were affixed to such consignment or agency agree ments? A, No, I do not. . Mr Wright: Your Honor I am willing to stipulate that this witness will testify that he does not know of any viola tion of this complaint, if it will save time. Trial Examiner Norwood: Off the record. (There was a discussion off the record.) , Trial Examiner Norwood: On the record. Objection overruled. By Mr. Gardiner: 3541 Q. Mr. Hurless, yon have previously been asked a series of questions about your knowledge of the existence of agreements between International ana t e other respondents in this case covering the sale and dis tribution of dry white lead. Ihave also asked you some ot the same questions with relation to white lead in ou. Is your answer the same as to those questions which you have previously been asked as to dry white lead _ Mr. Wright: You mean, with regard to agreements! 1874 Transcript of Proceedings. | Testimony of Frank II. Hu By Mr. Gardiner: Q. With, regard to agreements which have not been ashed you with regard to white lead in oil? A. The answer would he the same. Mr. Gardiner: Off the record. Trial Examiner Norwood: Off the record. (There was a discussion off the record.) Trial Examiner Norwood: On the record. By Mr. Gardiner: . _ Q. Is the respondent International now engaged in either the production or sale of any of the lead pigments heretofore described as included within the definition of the amended complaint? A. No. Q. When did International stop the production of dry white lead and lead in oil? ' 3542 A. Is the question, when did they stop? Q. When did International. stop the production of dry white lead and lead in oil? A. In July of 1948. Q. When did International make the last sale of those materials ? A. August, 1946. Q. Hoes International have on hand at the present time any of such products ? A. No. Q. What use is being made of the plant where these products were previously manufactured? A. _The plant where these produets were previously manufactured was sold to the Eagle Pieher .Company of Cincinnati, and it is my understanding that they are using a part of it for the manufacture of dry white lead and white lead in oil. Q. When was this property sold to the Eagle Pieher Company? A. On October 1, 1946. 'Q* When was the first public announcement made that International was going out of the white lead and oil business? A. On June 20,1946. 9* What was the nature of this announcement? bubstantially the same as the one for dry white lead. qf. Are the personnel who were engaged in the pro- llmtion and sale of these lead pigments i || | International ? | A. Only two. | Q. Who are they? | A My secretary, Miss Helen Ohr, an ;; Q. Are you familiar generally with ) fie International Smelting & Refining I Anaconda Copper Mining Company in ! 1 A Yes, generally. Q. Bo yon know of any facilities oi ; Ibis country or any other country tha ; converted to production of dry white X in oil? A I would say that there are no su Q. Would it he a correct statemeni l lack: into dry white lead or white leac i po'old be necessary to purchase or co: * that purpose? A. Yes. . I Q. Do you know if Internatiorl I S44 of resuming the production of tl I A. I believe that they have r ever, . ; Mr. Wright: I move that that ansvf Honor. This witness is obviously in : the intention of the hoard of directors a of the corporation. _ Trial Examiner Norwood: Motion i ; By Mr. Gardiner: ' . Q. In view of yomr familiarity | : Copper Mining Company's operatio: . any plan that it has to enter the pro< c-rials through any of its snsidiaries 1 A I know of no such plans. Q. Can yon elaborate on the reasc decided to go out of the lead pigmei A. Well, the reasons they decided pigment business are briefly Indies i announcement that was sent to the ti Q. Was international influenced : wav by the action of its competitors? f A. No. . Q. With relation to the time that ipt of Proceedings. agreements which have not beet to white lead in oil? I be the same, be record. 'ood: Off the record, ion off the record.) mod: On the record. .t International now engaged m | sale of any of the lead pigments | included within the definition of I tional stop the production of dry L in oil? >n, when did they stop? itemational stop the production. id in oil? v: * | I I ionai make the last sale of the I have on hand at the present tbse f made of the plant where these manufactured 1 hese products were previously * the Eagle Picher Company of bderstanding that they are using stare of dry white lead and white | ? 5 *. party sold to the Eagle Picher 'j: first public announcement made is going out of the white laid ! of this announcement f ie as the one for dry white lead. dio were engaged in the pro- Testimony of Frank H. Hurless. 1875 duetion and sale of these lead pigments still in the employ of International? A. Only two. Q. Who are they? A. My secretary, Miss Helen Obr, and mysell. 0 Are you familiar generally with the operations ot the International Smelting & Refining Company and the Anaconda Copper Mining Company m the United States? A Yes, generally. ,, , ... Q. Do you know of any facilities of the properties m this'country or any other country that could he readily converted to production of dry white lead or white lead in oil? , A. I would say that there are no such properties. 0. Would it be a correct statement to say that to go back into dry white lead or white lead in oil business, it would be necessary to purchase or construct a plant lor that purpose? 0. ' Do you know if International has any intention 3544 of resuming the production of these lead pigments A I believe that they have no intention whatso- eVMr. Wright: I move that that answer he stricken, Your Honor. This witness is obviously m no position to know the intention of the board of directors and governing officers of the corporation. . Trial Esaminer Norwood: Motion allowed. By Mr. Gardiner: Q. In view of your familiarity with the Anaconda Copper Mining Company's operations do you know ot any plan that it has to enter the production of these mat erials through any of its susidiaries. A I know of no such plans. T-nbimutimifll Q. Can you elaborate on the reasons why International decided to go out of the lead pigment business? A Well, the reasons they decided to go out of the lea pigment business are briefly indicted m the le*r <>t aSurancement that was sent to the trade n Q. Was international influenced m its decision may way by the action of its competitors? Q. With relation to the time that the decision was made 1876 Trcmscript of Proceedings. 'A | Testimony of Frank H. Hurl to discontinue these operations, do yon know when it wa, deeided to sell the plant? was A. I believe it was about four to six weeks after wards. 3545 Q. _ That is, it was four to six weeks after the decision was made to discontinue the operations that it was decided to sell the plant? :'i 0 ` Afternoon Session Trial Examiner Norwood; The heari . trier. Mr. Hurless will resume the stand. }. woal.d P^t it this way; I heard about the of lfflv iXfl1800?1 n116 0Perat.lons about the middle Wo I' 194?' aboilt fonr to six weeks after that we tegan to make efforts to sell the plant. THANK H. HURLESS resumed the sti : further as follows; Were there other parties interested in its purchase besides the Eagle-Picher Company? A. Yes. Q. Do yon know what the names of any of these urn speetiye purchasers were? y pro' r Metal and Thermit Company of East Chieao-n it^Lonls Zine> Lead belting Company^of Trial Examiner Norwood: Proceed examination. ] Cross-Eoxmination by Mr. Tf Q. Mr. Hurless, will yon state again wth the International Smelting & Refin ginning back in the beginning? Sp7o"i 0a*' Illdia,ia- Those were Vdi Mr. Gardiner: Your "Witness. .Mr. Wright: * fff? ihat C?uns,el has Wished his MTrrisfapfZST"i^r1- T 0rwwo+efre: ceIsss cfoournlsuenlchth. rough now? Honor. TM * 1 am through with this witness, Your A I was employed "by the Internal i Refining Company in 1922 as a checker c ; of a zinc oxide plant at Akron, Ohio. I C trials and supplies and the amount of construction since the construction wi liasis. j Subsequently I had charge of the sr | Akron, Ohio. - geSeS* N0rW00d: ^at ^ your pleasure, Q. That is still International Smelti A. That is right. : m*-" y^igbt| Two o'clock, o Jlf Bsammer Norwood; We will 'clock. recess until 2 (Whereupon, at 2 p. m., this day.) 12:10 p. m., a recess was taken until 3548 About 1927 I began part-time sai 1929 I began full-time sales wo: ferred to the main office at East Chica Q. That is, sales work: for Internath A. That is right. In 1930 I was made district salesma Midwest area and had charge of the sai and zinc oxide in the Midwestern area.: In 1936, I was made assistant sale charge of the sale of dry white lead, w zinc oxide. While assistant salesmans charge of the sales, since our official sali Ohio, had other duties that did not pei time to sales work. f In 1938, I was made salesmanager i i sale of dry white lead, white lead in < I all territories. ;:C . nscript of Proceedings. operations, do yon know when it taut? i !' was about four to six weeks after- tC it was four to six weeks after tk made to discontinue the operation 1 to sell the plant? f put it this way: I heard about tk f me the operations about the middle t bout four to six weeks after that we s to sell the plant. I tier parties interested in its purchase l her Company? | what the names of any of these pro- 1 ere? .; Thermit Company of Bast Chicago, '< a Zinc, Lead & Smelting Company of and the Calumet Iron & Supply eago, Indiana. Those were the pirn- tr Witness. Ussiest that counsel has finished Ms t we recess for lunch, wood: Is counsel throngh new? m through with this witness. Your wweod: What is your pleasure, Pw o'clock. f Norwood: We will recess until 2 , ^ ** a recess was taken untH Testimony of Frank H. Hurless. 1877 3547 Afternoon Session 2:00 p. m. Trial Examiner Norwood: The hearing will come to order. _ Mr. Hurless will resume the stand. FRANK H. HURLESS resumed the stand and testified further as follows: Trial Examiner Norwood: Proceed with the cross examination. Cross-Examination by Mr. Wright. Q. Mr. Hurless, will you state again your employment with the International Smelting & Refining Company, be ginning back in the beginning? _ A. I was employed by the International Smelting^ Refining Company in 1922 as a checker on the construction of a zinc oxide plant at Akron, Ohio. I cheeked the mat erials and supplies and the amount of labor used m that construction since the construction was on a cost-plus basis. , Subsequently I had charge of the small plant office at Akron, Ohio. Q. That is still International Smelting Company? A. That is right. , 3548 About 1927 I began part-time sales work and about 1929 I began full-time sales work and was trans ferred to the main office at East Chicago, Indiana. Q. That is, sales work for International Smelting? A. That is right. . In 1930 I was made district salesmanager. I was in the Midwest area and had charge of the sale of dry white lead and zinc oxide in the Midwestern area. , In 1936, I was made assistant salesmanager and had charge of the sale of dry white lead, white lead in oil, and zinc oxide. While assistant salesmanager, I actually had charge of the sales, since our official salesmanager m^Akrpn, Ohio, had other duties that did not permit him to give full time to sales work. . In 1938, I was made salesmanager m full charge of the sale of dry white lead, white lead in oil and zinc oxide in all territories. 1878 Transcript of Proceedings. Mjkon tfh\ *^e lllt6/na<:it>iial Sag thel leadSmtTK " tteorTs of "Mbt- that timp f Were you still salesmanager at A Yes, sir. tilling" 57" Position TMtb the fc* na"A- I am a STlPflTal 3549 a vrn 7' --"" representative 1 represent^' " ^ rePraTMMTM; a sort of general BefiiiiJoompM7?PreSident f Iriternational Smelting & landing that Mr. C. F. Kelly is p Company dfSisS!?^p-^presi-A. I do not w 0f " h"k m 193e. *> yon 'reoallt CoieJSf^Xrany^- *"* Md " Anaconda . Q-' &S?SJ" *!> of the board. mg Ss Refining Company? f Emotional Smelt- q Ihelieve that he is. BeJ,^ amp^y!direetors of'International Smelt- . A. Yes. lieve. Mr. E. 0. Sowerwine 18 a director, I be- Q Ja?32^r.*-^do Aq - l' you recall? -ILto vi_r. jjaist or M-r SJfvrrTM 4 . Atmconda Copper Ifinw E connected with the M50 A I beliPTrm t ^ p0oommppaannyy-min-a7nnvyVtxa/ayr"? . "rf Company"PreS*dent " Tftg* i?S ^ International "q * mi"? Comply`PreSldcnt of International Smelt- offi^rs^f ntFeari? lave ^efcsisTetary_treastirer- 6673 of ^ corporation are? % 171 lowing who the I Testimony of Frank 11 Eurle I_ | A. Yes, sir, I do. I Q. What is his position with. Anaconda j Company.? j A. Mr. Sowerwine is the viee-presideu Q. How many members of the Board < there of International Smelting & Refining IA. I do not know. Q. Bo yon know whether those memhe of Directors are also members of the Bo.1 ! or officers of the Anaconda .Copper Minim A. I believe that Mr. Kelly is a directc regards the others, I do not know. Q. And those three are the only on recall who are members of tbe board? A. Those that I believe are meml 3551 Q. Of International Smelting l pany? ' : A. Yes. Q. What other corporate officers are t" i three men? Of International, I am speak ' A. Well, let ns see. We have touched -vice-president, and-- ! Q. Seeretary-treasurer ? A Secretary-treasurer. I do not know that there are any othe: Q. Have you ever attended, a meetii Directors of the International Smelting pany? : A. No, sir. __ _ I Q. Do you recall ever receiving ins Doard of Directors of the IirternationE ning? A. No, sir. _ Q. Have you ever heard of a raeeti Directors of International Smelting & as such? . A. I cannot recall that I Have. Q. Who is the president of the At pany? A. I believe that Mr. C. F. Kelly i Q. Is Mr. Laist an officer* and direc i Sales Company? ^ ( A I don't believe that he is. ' Q. "Who are the other officers and i conda Sales Company? of Proceedings, jsition when the International any left the business of marketWere yon still salesmanager at ! ant position with the Interna- : isentative for the International ompany in the Midwestern area epresentative ? epresentative ; a sort of general t of International Smelting & ^ y ! f | | [g that Mr. C. F. Kelly is presi- ing- & Refining Company. - it back in 1936, do you recall? * . Kelly hold in the Anaconda t is chairman of the board. 1 treetor of International Smelt- I- ectors of International Smelt- deriek Laist is. Sowerwine is n director, I be- fctors, do you recall? iy are. Owerwine connected with the Jg Company in any way? st is the vice-president of the ig Company. position with. International director? ndent of International Smelt- ne'8,, position with Interaa!ora ? Hi is secretary-treasurer, iffieulty m knowing who the Testimony of Frank H. Hurless. 1879 A Yes, sir, I do. . Q. What is his position with Anaconda Copper Mining Company! . A Mr. Sowerwme is the vice-president, I believe. Q. How many members of the Board of Directors are there of International Smelting & Refining Company? A I do not know. _, Q. Do you know whether those members of the noara of Directors are also members of the Board of Directors or officers of the Anaconda Copper Mining Company! A I believe that Mr. Kelly is a director of both, but as regards the otheTs, I do not know. Q. And those three axe the only ones that you can recall who are members of the board? A. Those that I believe are members of the board. 3551 Q- Of International Smelting & Refining Com pany? Q. What other corporate officers are there besides those three men? Of International, I am speaking now. A Well, let ns see. We have touched on the president, vice-president, and-- Q. Secretary-treasurer? A. Secretary-treasurer. I do not know that there are any other officers. ^^^ Q. Have you ever attended a meeting ofthe Board of Directors of the International Smelting & Refining Com pany? Q* Do'you recall ever receiving instructions Board of Directors of the International Smelting & Refi ning? o' Havmvon ever heard of a meeting of the Board of Directors ofinternational Smelting & Refining Company, as sueM , __ QA. mT ca^nsnotthreecaplrletshiadteXnthaovfo*the Anaconda ^Sales Com- Sales Company? . t ^e'ar^office^andaix^ofitaA^- eonda Sales Company? 1880 Transcript of Proceedings. 3552 A. I believe that Mr. Clarence Glass is vice-presi dent, Q. What is Mr. Glass' connection with Anaconda? _ A. Well,. so far as I know his only connection is that he is vice-president of the Anaconda Sales Company. Q. He has no independent office or no other office in the Anaconda Copper Mining Company? A Not that I know of, Q. Who are the other officers of the Anaconda Sales Company? A. Mr. Kennedy is vice-president of the Anaconda Sales Company. Q. What is Mr. Kennedy's full name? A. I don't know. Q What did yon say his office was? A Yice-president-of the Anaconda Sales Company. ,, Q. Kelly, Mr. Glass and Mr. Kennedy are the three officers you know of in the Anaconda Sales Company? A. Mr. Dohrman, I believe, is either secretary or sec retary-treasurer. ' Q- Do either Mr. Dohrman or Mr. Kennedy have any Eg Corupany7U ^ f ^ ** Anacon^ CoPPer n* a ^now f any such connection. the aS/+ZU kiROw' they devote &eir full time to a P^?t\0^S of t]ae Anaconda Sales Company? A. That is my understanding. 3553 W* ?e Alternational Smelting & Beftn- pi|neS 7 en:aSe in the P*0*TM*TM of lead n* o1 Slatter part of 1936. sales of drv^hi f-p^pn 7u, 7u had to do with the company was nS If' ^^Ahe period 1930' to 1936, that white lead. Is that coSSt? " P^etion or sale of A. Ho. '. tion. matwasth6a^angement? I withdraw that qnes- thfprodnftionwfs1 hvS ?orid from 1930 to '36, sales were hy Anacmuhft Ta Prodtlots, and the Sa*es ^Pany._ Is that eo^ecf? and Anaconda That is right. . . * ell, how did you, as an employee of International Z' it '! Testimony of Frank H. 1 I t; . `i Smelting & defining Company, have c i at that time ? A Well, in my capacity--for exa !, district salesmanager--I simply sold- tl produced by the Anaconda Lead Prodi Q. Well, were you acting for Anac< Anaconda Lead Products Compan; Smelting & defining Company, or ( one began and the other left off? A. They were pretty much overl; Q. Did they Lave common offi 3554 ployees during that period of 1 A. Well, the main office of ' Company at that time was in New Yc main sales office at East Chicago, point I operated. Q. Were employees of Anaconda k ting that office too, or were they ernp' A. No. ,, 3 Q. Were employees of the Anaco; that office? i A. Yon mean, in the sales office? s. Q. Occupying joint offices ? I A. Well, the operating sales ar | ments all had theirofficesin East. 1 building. ' : Q. Was it the same department w or were they physically separated? . A. Will you state that question; > | Q. Was it a single office with were the sales and. accounting offices physically separated ? A No, the offices were not pnj there were different accounts, Ana aud the Anaconda Lead Products C< Q. For bookkeeping purposes? A. That is right. ' Q. Now, when yon sold dry whitf that transferred on the books 3555 Products Company to Anacoi International Smelting & Pel yon know how that was handled. A. If a sale was effected throu.| Company, I would say that there w> Anaconda Lead Products Company Company. 'ranscript of Proceedings. eve that Mr. Clarence Glass is vice-presi- r. Glass' connection with Anaconda? r as I know his only connection is that lie ff the Anaconda Sales Company, ndependent office or no other office in the Mining- Company? know of. te other officers of the Anaconda Sales ly is vice-president of the Anaconda Ij H Kennedy's full name? a say his office was ? at of the Anaconda Sales Company. Iy, Mr. Glass and Mr. Kennedy are the ow of in the Anaconda Sales Company? i, I believe, is either secretary or. see . Dohrman or Mr. Kennedy have any know of with the Anaconda Copper of any such connection. : know, they devote their full time to Anaconda Sales Company? derstanding. 1 the International Smelting & Kefin- rst engage in the production of lead 'art of 1936. A' . time you say you had to do with the a, from the period 1930 to 1936, that. gaged m the production or sale of rreet? rrangement? I withdraw that ques- luring that period from 1930 to '36, Anaconda Lead Products, and the ida Lead Products and Anaconda t correct? . ' i; r *v r. as an employee of International Testimony of Frank H. Hurless. 1881 Smelting & Refining Company, have charge of those sales at that time? . , A. Well, in my capacity--for example m 1930 I was district salesmanager--I simply sold the products that were produced by the Anaconda Lead Products Company. Q. Well, were you acting for Anaconda Sales Company, Anaconda Lead Products Company, or International Smelting & Refining Company, or could you tell where one began and the other left off? _ A. They were pretty much overlapping. Q. Did they have common officers and common em- 3554 ployees during that period of time? A. Well, the main office of the Aanaconda bales .Company at that time was in New York City. .We had our main sales office at East .Chicago, Indiana, from which point I operated. Q. Were employees of Anaconda Sales Company opera ting that office too, or were they employed in that office? A. No. Q. Were employees of the Anaconda Lead Products m that office? A. You mean in the sales office? Q. Occupying joint offices? ., , A. Well, the operating, sales and accounting depart ments all had their offices in East Chicago in the same building. Q. Was it the same department with different accounts, or were they physically separated? _ A. Will you state that question again, please? Q. Was it a single office with different accounts, or were the sales and accounting offices of the three companies physically separated? ,,, A. No, the offices were not physically separated, but there were different accounts, Anaconda Sales. Company and the Anaconda Lead Products Company. Q. For bookkeeping purposes? A. That is right. , A , ,, , ,, A Q. Now, when you sold dry white lead at that time, was that transferred on the books from Anaconda Lead. 3555 Products Company to Anaconda Sales Company to International Smelting & Refining Company, or do you know how that was handled! . , c, , A. If a sale was effected, through the Anaconda Sales Company, I would say that there would be a transfer from Anaconda Lead Products Company to the Anaconda Sales Company. 1882 Transcript of Proceedings. Q. Hew, would you effect such a sale in the name of the Anaconda Lead Products Company in your capacity as salesmanager in that district? A. I would not effect it, no. I would simply sell the material. Q. You were the one who would make the sale?1 A, That is right. Q. Would you know in advance for which account it would he sold? A- To some extent that would depend upon the imme diate shipping point to the customer. Q. In other words, there were certain territories in which accounts were for the Anaconda Sales Company? A. That is right. Q. Anybody located in that territory? A. That is right. Q. But that was the only basis of division? A. That is right. Q. Now, was part of your compensation paid by Ana conda Sales Company, part by Anaconda Lead Prod- dooo pets, or were you an employee solely of International Smelting & Befining? A. I understand that I was an employee solely of the International Smelting & Befining Company. y. You don't know whether the other two companies were compensated for your services in selling for their account? & A. don't know about the Anaconda Lead Products tympany. I don't think the Anaconda Sales Company was, but I am not sure of it. ^ wheu the International Smelting & Befining Company acquired the plant of the Anaconda Lead Prod ___m 1936? will you tell us just what changes Were m?de necessary as a result of that, of personnel, changes in methods of handling T as,^ reead it there were praetieally no changes. I don't remember any that were made at the time. g larwl-c- n J3118TM638 was continued on. It was transaction? O nght, pretty much the same as before. Yourself an employee of the ^rgamzahon, I mean disregarding the techni- Testimony of Frank H. Hurless. Q. Did you ever attend any meeting of tb Directors of the Anaconda Sales Company? A No, sir. 3557 Q. Did yon ever see any minutes of the Board of Directors of that company? A. I don't recall that I ever did. I Q. Do you know whether there has ever bee to your knowledge? A I don't know of any actual meetings, bi {here have been. Q. Do you know Mr. F. O. Case ? A, Yes, I do. Q. What was Mr. Case's position in 1933 A. hi 1933,1 believe--I am not too sure < I believe he was general salesmanager. Q. Of what company? A. Of the International Smelting & Befmi pigment division. Q. In other words, he was your superior I time? A. That is correct. . Q. He was not an employee of the Ah Company or of the Anaconda Lead Products A I don't believe so. Q. Is he still with the Anaconda organ! A. MY. Case is with the Anaconda organi Q. "What is bis position now, do yon knot A, I understand Ms position at the pi assistant to the president of the Anaconda < Company. ; .' 3558 Q. How long has he been in that pi A. I think since about October of 15 Q. For how long a period of time did 1 International? _ A. I believe Mr. Case originally went wif about 1920 or 1921. j Q. How loug did he remain? Mr. Gardiner: If your Honor please, I \ what counsel has in mind here by this line ; but we are perfectly willing to stipulate i pames---Anaconda Lead Prodnets, Anacoi pany and International Smelting & Refin i were all subsidiaries of the Anaconda Copp pany, and the Anaconda Lead ^Products Ca and the Anaconda Sales Company, if the matters. cript of Proceedings. i effect such a sale in the name of tig uets Company in your capacity as district? `ect it, no. I would simply sell tie le who would make the sale f` w in advance for which account it ft that would depend upon the imm I i the customer. , there were certainterritories k tr the Anaconda Sales Company? . in that territory? I f I $ ;; J only basis of division? f your compensation paid by Amany, part by Anaconda Lead Prod in employee solely of International ig? t I was an employee solely of tie & Refining Company, whether the other two companies your services in selling for their )ut the Anaconda Lead Products ii the Anaconda Sales Companr rf it. ' atemational Smelting & Befining lant of the Anaconda Lead Prod rill you tell ns just what changes de necessary as a result oi " , changes in methods of there were practically no changes, at were made at the tiroe^ siness was continued on. It was nsaefion? . 7 much the same as before, ir yourself an employee of the [ mean disregarding the teehm- ?: 4 I am_ a direct employee of the Refining Company. Testimony of Frank H. Hurless. 1883 Q. Did you ever attend any meeting of the Board of Directors of the Anaconda Sales Company? A No, sir. 3557 Q. Did you ever see any minutes of a meeting of the Board of Directors of that company? A I don't recall that I ever did. Q. Do yon know whether there has ever been a meeting, to your knowledge? A. I don't know of any actual meetings, but I presume there have been. Q. Do yon know Mr. F. 0. Case? A. Tes, I do. Q. What was Mr. Case's position in 1933? A. In 1933,1 believe--I am not too sure of the date-- I believe he was general salesmanager. Q. Of what company? A. Of the International Smelting & Refining Company, pigment division. Q. In other words, he was yonr superior officer at that time? A. That is correct. Q. He was not an employee of the Anaconda Sales Company or of the Anaconda Lead Products Company? A I don't believe so. Q. Is he still with the Anaconda organization now? A Mr. Case is with the Anaconda organization. Q. What is his position now, do you blow? . __ A I understand his position at the present time_ is assistant to the president of the Anaconda Copper Mining Company. _ 3558 Q. How long has he been in that position? A I think since about October of 1946. Q. For how long a period of time did he remain with International? _ A. I believe Mr, Case originally went with International about 1920 or 1921. Q. How long did he remain? _ Mr. Gardiner: If your Honor please, I don't know just what counsel has in mind here by this line of examination, but we are perfectly willing to stipulate that these com panies--Anaconda Lead Products, Anaconda Sales Com pany and International Smelting & Refining Company-- were all subsidiaries of the Anaconda Copper Mining Com pany, and the Anaconda Lead Products Company is today, and the Anaconda Sales Company, if that will facilitate matters. mm* 1884 Transcript of Proceedings, Trial Examiner Norwood: Is that satisfactory? . Mr, Wright: I appreciate that there is no issue there, bat counsel has raised the issae that the acts of these subsidiaries could be placed in a separate compartment, and neither had any responsibility for either of the others might have done. I think I have a right to bring out, since this question of this "witness ' relationship to the Anaconda Copper Mining Company was brought out on direct exam ination, this relationship on cross-examination. . . Trial Examiner Norwood: Yes, this is cross-ex- 3559 amination. Mr. Gardiner: I am not objecting, but I did not know what he was after. . Trial Examiner Norwood: Counsel may except that offer to stipulate in whole or in part, and be governed accordingly. Mr. Wright: Well, there never was any issue as to whether there was a relationship of principal to subsidiary. Trial Examiner Norwood: All right By Mr. Wright: Q. When did Mr. Case leave International and go with Anaconda? A. I believe that was about October of 1946. Correction. Mr. Case left International, I believe, about two years before the war ended to go to Las Vegas, Nevada, as gen eral manager of Basic Magnesium, Incorporated. Q, But up until that point he still had a connection with International? A. That m my understanding, yes. Q. So during the period from 1930 to J36, he was in charge of sales policies on these pigments of International? A. I believe that is correct. Q: From whom did he get his authority to act in deter mining sales policies in that period ? v-cn a , ^ believe that Mr. Case pretty much oapo developed his own policy as regards things, other words, he was directly subordinate to tbe officers and directors of the International Smelting & Kenning Company? ; vfe <Jar<5inr: If Your Honor please, I do not want to each question, hut; I think the witness testified knows.8 t0 ^ m tIiese matters rather than what he ,iMs witness has testified, we did this and we did that, all morning, with regards to Testv, the period from 1 that he has no i policies were in tl I his direct testimo Trial Examiner \ state his views. I Mr. Gardiner: his instructions. . Mr. Wright: r. Mr. Gardiner: other words, he m Trial Examine statement whethi knowledge, > By Mt . Wright Q. Mr. < 3561 whom you ; \ that period i A. That is rih 1 Q. And you c | Mth Mr. Case; i j A. Yes. ` : t Q. And you a | that correct? I A. I would no | I}. Duncan, who ; Ohio. Q, Salesman^ A. That is r: manager. Q. Who in t ; responsible to? A. I do not 1 Q. You know ' hen, and Mr. C & Refining? . ; A. I cannot reported on thes handled himself Q. You do : from the board the compa 3562 A. I dthat wouli Q. Now did a...:. fceedings. 3 that satisfactory! i there is no issue- there, 1" that the acts of these |p t separate eompartmest |; r for either of the others \ right to bring oat, since ionship to the Anaconda ' xght out on direct exam^animation- Yes, this is erass-ex- 1 )hjectmg, but I did not ] nisei may except that part, and be governed J was any issue as te | principal to subm-thaiy | ight. ft' ernational and go witt er of 1946. -Correctm eve, about two years togas, Nevada, ae .gsBIncorporated. ^ had a connects with 130 to '36, he was is .eats of InfernstioBal? hority to mst indeter- *. Case pretty ards iMags-.' .rectly subordinate te ternafioasT ise, I do noi.waait.tethe witness: teshSed rather than, wfeatjse itness has tested, ing, with Testimony of Frank E. Hwless, 1885 the -period from 1930 on. Now, if counsel wants to urge that he has no authority to state what the company's policies were in that period, I am going to move to strike Ms direct testimony. ., Trial Examiner Norwood: I think he may go ahead and state his views. _+ Mr. Gardiner: He was asked, where did Mr. Case get Ms instructions. Is that correct! Mr Wright: That is correct. T Mr. Gardiner: And Ms answer was, "He believes. In other words, he must know that. Trial Examiner Norwood: He may make Ms own statement whether it he belief or whether it be direct knowledge. By Mr. Wright: m Q. Mr. Case was your immediate superior Irom 3561 whom you took your instructions, I take it, during that period from 1930 to 1936! Q." And*you discussed the policies of the organization with Mr. Case; is that correct! Q. And you and Mr. Case determined those policies; is thM correct.^ ^ gay Mr> Case and I alone. We had Mr H G. Duncan, who was salesmanager with Ms office at Ak m Q. Salesmanager for International? A. That is right, up until the time I was made sales ^^j^Who in the corporate organization was Mr. Case responsible to? q T Yo u Imowof no one between theoffieersaud Actors, then, and Mr. Case in authority in International Smelti g & r^Lot name any individual reported on these matters. That is something tha . ^ Yo'fdfiot ^ of ^ fastr-notione from &e board of directors or fte corporate officers a* 3662 WJS any specie mstmcttons be got that would affect the sales policy. uartici- Q. How did you in the period from 1933 to 1944 parum 1886 Transcript of Proceedings. pate in any of the Lead Industries Association pigment division meetings ? A. No. Q. Who handled that? A. "Well, if there was any participation on onr part I presume that Mr. Case would do it. ' Q. So you were not present at any of those discussions to know what matters were discussed at those meetings between 1933 and 1914; is that correct ! A That is correct. Q- I believe you mentioned in your direct testimony this morning that there is a quarter of a cent differential, or discount, for carload purchases of dry white lead. * A. Uuder the less-carload price. Q. Under the less-carload price; is that correct t A. That is correct. . Q* Can you tell me how long that differential has been m force? A No, I cannot. Q. Bid you ever discuss that differential with Mr. Case, that yon recall! A. I do not recall it. 3663 . You do not recall Mr. Case's having any interest m adopting such a differential ? A Ido not recall anything about it, either way. Q What is the International Lead Refining Company! A I think the International Lead Refining Company Comp^ySidiaTy f the International Smelting & Refining _ Q* sdow A011 document in evidence as Commission's vif which has been identified as a letter written t T ' " C*ase! Manager of the Anaconda Zinc Oxide epartment, International Lead Refining Company, under date of July 24* 1933. * Boes that refresh your recollection as to that! A As to what? Company?0 ^ relatioflshiP of international Lead Refining aA that when we hnilt our Zinc Oxide Plant at p SU A?' Was \mder the liaie of International Lead a t * Cwnpany, Anaconda Zinc Oxide Department. ^ otJaer WOrds> rt "was known as the Anaconda Zinc Testimony of JPrcmk H. E Q. I call your attention to that pari beginning with the words "I am not ee to read that. 3564 Mr. Gardiner: I believe this is It is in here. _ You are asking him to read it to bin Mr. Wright: Yes, sir. By Mr. Wright: Q. Bo yon recall discussing the r. the last paragraph of Commission's Mr. Case? : A Apparently this applies to 1 believe that in my 'capacity as distrie nothing to do with the Pacific Coast a Q. I want to call your attention understand that they are going to cl one quarter of a cent for all sbipmi which is in addition to the "Pacific C1 Bo yon recall that matter ? A I do not know that I understa Q, Do you recall any discussion the advisability of adopting that a letter, July of 1933, a less than ca quarter of a cent on dry white lead A. Por shipments under five toi Q. Yes, sir. A 1 do not recall that at all. . remember hearing or seeing as 3565 ton differential. j Q. There is a five-ton did A There is not at tire present when he went out of the_ "business b Q. Would you explain, again fo you called your consignment arrap nation? " A. Orders wonld be taken frof ment on our consignment arrang would mad the orders direct to o| the consignment arrangement. Q. Bid yon offer that to any d A. No, I do not think we offe I wanted it. We would try to rest thought would sell a reasonable t Q. You say, there was no ecu A Not except in the State of k 'if Proceedings, ndustries Association pigment y participation on our part, I l do it. nt at any of those discussions discussed at those meetings it correct? ted in your direct testimony quarter of a cent differential, 'liases of dry white lead, price. price; is that correct? ng that differential has been it differential with Mr. Case, Case's having any interest ential ? about it, either way. al Lead Refining Company? al Lead Refining Company ational Smelting & Refining a evidence as Commission's dentified as a letter written r the Anaconda Zinc Oxide 1 Refining Company, under iction as to that? ntemational Lead Refining ilt our Zinc Oxide Plant at ame of International Lead ine Oxide Department, awn as the Anaconda Zinc it was part of the Intertnpany; is that right? Testimony of Frasih S, Purless. 1887 0. I call your attention to that paragraph of fins !e beginning with the words "I am not certain, and as y to read that. . ,,, 3564 Mr. Gardiner: I believe this is a matter of record. It is in here. ,. . 4 You are asking him to read it to himself, are you not? Mr. Wright: Yes, sir. Q7 Do you Recall discussing the matters the last paragraph of Commission s Exhibit 508-B MA.C Apparently this applies to. the Pacific Coast. I believe that in my capacity as district saiesmanager, nothing to do with the Pacific Coast at ihat time. ( Q. I want to call your attention to the fact,^ And I understand that they are gomg to Gharge a a^Eeremtial o ? one quarter of a cent for all shipments under five tons, which is in addition to the Pacific Coast situation. Do von recall that matter? A. I do not know that I understand quesfaom Q. Do yon recall any discussion with ^r- -^t the advisability of adopting that about &e date f th t letter, July of 1933, a less than carload differential ot quarter of a cent on dry white lead? A* For shipments under five tons? i Fao Mt recall that at all. remember hearing or seeing anything abo 3565 t0o'3iraSfi8 a five-ton differential, is there notI A. fSere k not at the present tim or there was not when he went out of the business m 194t>. ^ Q. Would yon explain apm for me Mr, Hortos, VM* you called your consignment arrangement on direct examr "l" Orders would he -- &maTflrrS11TM & o for shipment on T|Ss5f3.Si:?S.t; wthaonutgedhtiwt.ouWlde sweUoualdretarysonaJb.leesamount Doff ^1e^uj in oil. 0 You say, there was no contract mvoiveai 1 Not except in the State of Wisconsin. a 1888 Transcript of Proceedings. Testimony of Q- How did you bill your shipments of that lead? A. The shipment was billed to the Anaconda Sales Com pany or the International Smelting & Refining Company in care of the account that was purchasing the lead in oil or that would purchase it eventually from consigned stock. Q. How, then, the customers who had that arrangement would file reports monthly showing what they sold in vari ous sized containers; is that correct, during the month? _ A- Our report had the different sized containers do66 listed with a separate column for each one, from 100 pounds down to 1 pound. 0* What did the dealer fill in those columns with f What sort ot figure did he put in those columns ? Simply ponnds sold, or what? .. * ^ we put on the report before it was mailed the amount of stock that our hooks showed was wii'r ^J the dealer and the amount of lead in oil that had been shipped since the date of the last report. The eater would insert his present stock on hand, which would be the number of different sized containers. that report?Wiiat ^ tlie bi31inS trarLSa^ion that followed ?ewet; WkTM rTrt 7as r"eivI from the dealer, it is, taaaaeeof hSf> ferlment for that f^e &Igtaealerpri"' thedeaJer's Mt PTM Sh0TM as ' mmt obh*itW 1<mg f a peno4 time did that arrange- 3567 th^oonlSteT^iT^ period of time did we have consigned stock arrangement1? SJe Yes, six. * I bQe.Alievne dwwe setarrtwedtg^p but I^--corre+ction: it t s d Pena did you eontmue to use im' TMil .ta we went out of business the toiroIIitStS0of attDtS *? fr*6 trade cover- meat? 011:10118 of aat consignment arrange- I A, Well, when there 's f (low, we always notified | jnd consigned stock arra i -are them the terms of se j (], You supplied those i nairas are in the record 1 ':i wiling schedule, as in. Cm I A, That is correct. ' i (j, As well as the deal) I That is right. 1 Q, Getting hack to tli ofselling appeared on wf lot was around 1933 or A, It was around 19 ; Member. : Q. The latter pa 356S A. I do not knoi Q. How did you: j me method? : A. Well, we really d I ksiness of producing a 1 veil along in 1932, and I i ; loch on a hit or miss b; 3 Q; How did yon firs ;j Being! >1 L Well, something | - naturally cause considt _ would pick up infomnat fee dealers on whom wi Q. Hid these dealer i; from any competitors? A. I do not believe t Saving a zone map. Q. As I recall it, yoi you determined those i you picked up in the tri A. That is correct, i 1 Q. If the dealers di> you get the complete : on those zones and the and the different) 3569 We would pids dealer in the so-ci Davenport, and: Moline cript of Proceedings. ill your shipments of that lead? as hilled to the Anaconda Sales Corn ual Smelting & Refining- Company ia at was purchasing the lead in oil oi eventually from consigned stock, nstoniers who had that arrangement lily showing what they sold in variU that correct, during the month? : hail the different sized containers .rate column for each one, from 106 1 pound. ler fill in those columns with? What t in those columns ? Simply pounds i would put on the report before it >f stock that our books showed was and the amount of lead in oil that the date of the last report Tie present stock on hand, which would ent sized containers, le billing transaction that followed was received from the dealer* it department for processing; that him. m then for the dealer's net price correct ? r for the amount shown as i current price, price? period of time did that arrange- feat period of time did we have arrangement? we started it, but I---correction: he latter part of 1932. a period did yon continue to use it until we went out of business Bounce-meats to the trade cover* of that consignment arrange* Testimony of Frank II. Hurless. 1889 A. Well, when there was a price change either up or down, we always notified our dealers both on direct sale and consigned stock arrangement of the new prices, and (rave them the terms of sale. ., ., 0. You supplied those dealers with these price cards, such as are in the record in evidence here erS selling schedule, as in Commission s Exhibit 661-Z-36? A, That is correct. .. Q. As well as the dealers' confidential pnce list? Q* Getting back to the first time t^atT*erZOIie_r"ieti*5 of selling appeared on white lead in oil, I believe yon s that was around 1933 or 1944, did younot? A- It was around 1933, as I recall it But I do not remembe i^ter part of 1933? 3568 Q. ^d^7sell white lead in oil prior to that ZiL mWelL we really did not begin to get started in the business of producing and selling white lead in oil until well along in 1932, and I think that onr methods were pre ty Howlid0^8^8^ about this zone method of ^A^Well, something like that being naturally cause considerable comment initially, 0"_____ would pick np information from the dealers and p maps or anything fT 'MfSSSSW I ever saw or hoard of a dealer *T8i XSt, yonr SSSS^STfcSfci. dealers and forth. n Tf^fweSrdid not have a zone map, how would Q- i + information for the whole country JTtet ttrSd tte territorial divisions between tea, and the differentials? . ,,, 3569 deSr^te iSwfflJSS* S or a Davenport, and. Moline, who was any land or dealer at an fnt" r 1890 Trcmscript of Proceedings. would know that in. that territory where the par zone left off and the one-eight zone began. Then we could talk to a dealer or distributor in Richmond, Virginia, or vicinity who would tell us where the par zone left off and the one- eight zone began in that territory. _ _ Q. - Are you telling us how you may have found that information or how you did find it? A I am telling you how we did find it, piecemeal, and put it together. Q. Over how long a period of time did that obtain? A. I do not know that I can answer that. We did not get it all at once. I know that. Q. But you recall very well that process of piecing it together? ,; A I remember that we had quite a time getting some of the information, and that we spent quite a little time and money doing it. Q- Mr. Case also participated in that, I take it? A. That is correct. Q. Since he was salesmanager at that time? A. Yes, sir. ; ` Q- You don't recall Mr. Case mentioning that 3570 such maps or zones bad been discussed at meetings of - the Lead Industries Association, do you? A No, I do not. ` ^ Bn dry white lead, as I recall your testimony, you stated that you allow freight to the customer. Does that mean, that you ship the material freight collect, and allow the amount of freight that the customer shows has been PTMd pn fee invoice When billing for the material? A Noy, we prepaid all freight charges. , At all times? A That is right. <Q.; Dn all prodnets? A That is right. JSxamaner Norwood: Now, do you allow the same nreigat that you paid on everv package^ Witness: Well, for example, if the price of white leadm oil were 10i cents per ponnd in hundred pound sTM* TM w were shipping from East Chicago to &PrePay the actual freight from East foAtron, Ohio, and bill the customer at 10J cents , * pound, Norwood: But in shipping it to dif- , Testimony of Prank H. Hurles \ 1> ' ireht, pieces in a zone, would you charge j ffiigMgini-eyrery `.case ? MVfPlfifiWitness: We would prepay the ads-fee Customer did not actually ps '|i?^^^Smniner Norwood: But the freig was it? Yes, sir. ___r,,_ Norwood: Was that ss ht^gcered'm the price that you paid iStness: Well, our price structure ' We 'charged the same price, i res point of delivery, whatevi ^ ler Norwood: And then cl -eight'' differential or an average ,Ker price. Is that right? Well, you mean from a V-v '-i__. , . iner Norwood: That is ri| I believe in figuring ou figure for freight. ;ht:.fi-May we Rave a five-mine ` .er Norwood: We will ta ^^e8 was taken.) ; her Norwood: Are yon re fin? ... jvw_ jht: . Yes. ; MldEbtaminer Norwood: Proc a representative of t fi&aRing on yon in March o Lon the Commission wad `Representative called, but I ti recall Mr. Dunn, attorney calling on yon? nnember, he was Mr. Carn "recall making a statement t the consignment practL an fee faff of '33 rather th s, tie par zone left re coaid talk to a f inia, or vicinity, | off and the one- | have found that I t, piecemeal, and that obtain? lat. We did not | i j s s of piecing it j ue getting some f ite a little time f [ take it? | time! I lentioning that I L at meetings f | m? I testimony, yon aer. Does that Iect, and allow hows has hem iterial? | f * f s dlow the same price of white mdred pound st Chicago to ght from Mast r at 10| cents ing it to dif- Testimony of Frank H. Hurless. 1891 ferent places in a zone, would you charge just the actual freight in every case? The Witness: We would prepay the actual freight, 3571 and the customer did not actually pay any freight as such. Trial Examiner Norwood: But the freight was figured in that price, was it? The Witness: Yes, sir. Trial Examiner Norwood: Was that same amount of freight figured in the price that you paid, or was it an average figure? The Witness: Well, our price structure was that in the* same zone we charged the same price, paid the actual freight to the point of delivery, whatever that freight might be. Trial Examiner Norwood: And then charged an aver age freight differential or an average freight amount added into the price. Is that right? The Witness: Well, you mean from a cost accounting standpoint ? Trial Examiner Norwood: That is right. The Witness: I believe in figuring our costs we used an average figure for freight. Mr. Wright: May we have a five-minute recess? Trial Examiner Norwood: We will take a five-minute recess. (A short recess was taken.) Trial Examiner Norwood: Are you ready to go ahead, gentlemen? 3572 Mr. Wright: Yes. Trial Examiner Norwood: Proceed. By Mr, Wright: Q. Do you recall a representative of the Federal Trade Commission calling on you in March of 1944 regarding the investigation the Commission was making in this case? A. One representative called, but I don't recall the date. Q. Do you recall Mr. Dunn, attorney-examiner for the Commission, calling on you? _ A. As I remember, he was Mr. CarmichaeL Q. Do you recall making a statement to Mr. Carmichael at that time that the consignment practice of International was initiated in the fall of '33 rather than '32 ? 1 1892 Transcript of Proceedings. A. Yb, I don 't Q. Going back to the parties, the different corpora tions^ that were involved here, did the International Smelt ing& Refining Company make any annual report to the stockholders or balance sheet showing- its profit, losses expenses and earnings ? ' Mr. Gardiner; If Your Honor please, I object to that question I do not see the purpose of that, as to what report the International Smelting & Refining Comuanv may have made tp its stockholders. I don't see that that has any bearing in this particular case. ^r-Wright: Well, Your Honor, he has certainly dh'/d raised an issue here of the responsibility for the 0t *rSAIanous std|sidiary corporations, audit that opens up the field pretty wide for determining their act relationship. * r tJV. Examiner Iforwood: I think yon may show it f T^irLrp0Se' Tile objection is overruled. : Wih you read the question, please ? S fe1161 Norwood: Read the question. a w ^ ^wostion was read.) nothina to f31 sale5) 1 wnld really have By Mr. Wright: tion werea^-pdroio+f Ssame if a similar ques- panyT d relat% to Anaconda Lead Products Corn- A. Yes, .. . ;' A! y S `&Baooilda Sals Company? ymrjjjfero. East Chicago, Indiana, in tte " f B6gardln dn'i.huw of any business it had in that A. No, 1 do not. 3574 snijoeated ^Sis^office?11107668 f Anaconda' M tte -^ua^nda Copper -------- -- ^ eaptoyee, of tie ti.reo snbsidiaiy Testimony of Fr<^ L I don't believe we had Bonda Sales Company at Ea% Q. Well, weren't all the sa; p&ny of these pigment producy A. Well, we made the sale^ lar sales organization. In tho< tional Smelting & Refining 0, Jb business, the sales were ry gales Company. _ Q. Did you have anything policies of the company with . A. I would not say I had kies, but I did have consider ment of advertising. - Q, Where was this advert: media? - : A. Are you speaking noy load or zinc oxide? Q. If you can make one in oil and dry white lead, t: cannot, just separate tt 3575 A. I think that we white lead in the Americ ?e ran advertising on whit< Painter and Decorator and i: zinc. : Q. Do you recall an ady tional to the effect that its other preparations on the rq A. Our what you rnigl brighter,"' i Q. Do you recall adverti to, that your white lead was petitive products? : A. Yes, we advertised t Q. Did you advertise she lead over white lead of a c Mr. Welch: Your Hono is not a false representation I don't think that kind of cf Trial Examiner Horwooc of competition. : Mr. Wright : If Your H. my purpose will he plain, up, I will be happy to enter >f Proceedings. Testimony. of Frank H. Purless. 1893 arties, the different corpora3, did the International ake any annual report to the iet showing its profit, losses, lonor please, I object to that purpose of that, as to what netting & Refining Company lolders. I don't see that that ncular case. Sour Honor, he has certainly ff the responsibility for the ibsidiary corporations, and it up the field pretty wide for nship. j I think you may show it ion is overruled. sad the question, please? Read the question. 3 read.) ; I in sales, I would really have of thing, and I don ?t know ? set, if anything. 1 1 the same if a similar ques- | aaconda Lead Products Com- f Company? l Bast Chicago, Indiana, in business for the account of .`Company? ay business it had in that imployees of: Anaconda, as | e-^ . '1 ledg*^ the Anaconda Copper f ees of the three subsidiary -I A I don't believe we had any employees of the Ana conda Sales Company at East Chicago. Q. Well, weren't all the sales of Anaconda Sales Com pany of these pigment products made through your office ? A. Well, we. made the sales, as such, through our regu lar sales organization. In those States where the Interna tional Smelting & Refining Company was not licensed to do business, the sales were made through the Anaconda Sales Company. Q. _ Did you have anything to do with the advertising policies of the company with reference to these pigments? A. I would not say I had anything to do with the pol icies, but I did have considerable to do with the develop ment, of advertising. Q. Where was this advertising run principally, in what media? A. Are you speaking now of white lead in oil or dry lead or zinc oxide? Q. If you can make one answer covering white lead in oil and dry white lead, that will be all right. If you cannot, just separate the two. 3575 A. I think that we ran some advertising on dry white lead in the American Paint Journal, and I think we ran advertising on white lead in oil in the American Painter and Decorator and in the National Painters Maga zine. Q. Do you recall an advertising campaign by Interna tional to the effect that its white lead was whiter than other preparations on the market? A. Our what yon might call slogan " `Whiter and brighter."1 . Q. Do you recall advertisements of the sort I referred to, that your white lead was brighter and whiter than com petitive produets? A. Yes, we advertised that. Q. Did you advertise showing a spot of Anaconda white lead over white lead of a competitor? ;^ .Mr. Welch: Your Honor, we object to this. This case is not a false representation case; this is a conspiracy case. I don't think that kind of question is proper. Trial Examiner Norwood: I think it goes to the matter of competition. .. Mr. Wright: If Your Honor will bear with me, I believe my purpose will be plain. If it is not sufficiently connected up, I will be happy to entertain a motion to strike. r 1894 Transcript of Proceedings. Testimony of l 3576 Sl 'wituls: %.I h&ye the question, please? 576 {TbeJendm question was read.) P e? A We advertised that Anaconda white mahe a white spot on ordinary lead. Xead ^ By Mir. Wright; Q. Over what period of time did you advertise that fact? A. Over a considerable period of time, Qwas? weii, can you give me some estimate of what that A. WW fl WOldd a7 P^hably a five-year period QA . TWhat fJive y- e--a--r-s *i. sAlwlCChtaUtUI meant 19B or S eSfamate &at perhaPs from WS or '34 to representing International inlh^T6 to do wasawarettattwTMent ^teTMational I Relieve that I the use of white leadTAoiL^0^ & campaien to furtllcr Al ifttendpl^^7?160^3 0? tke association? . eussed the media foTadveHiSag. WhlCh' 1 TM dis' before any^o^ ever taking P^ee reference to your advertising- pQ<iustries Association with to competitors' wMte ffif Whlte lead as whiter 3577 o {Td<*t recall of any. i Well Serew ^ in y0Ur *>* nQ "?* at ** I s present. *scnS8ioa f " T Mr. Wright: I hare no further questions. at wUdl BeiiTM Ezmimtion ty Mr/Gardiner iz\ H^ricss. T^fgTTn-rt~ j salesman at Bast Chicago ^ io JPUV activities as a fuf the companies that wo 70u sf? any products for lead in oil and dry white lead ?re ^cutioned besides white k. Will yon repeat the o Trial Examiner Norwood (The pending question wi A. When I was a salesr white lead in oil, I also sol< 1 By Mr. Gardiner: Q. Over what period di< : A. Well, I sold, zinc oxi J that I sold lead pigments. j Q. Yon have testified, A sales on behalf of Anaeo Lead Products and It i 3578 was there any reasoi a cost accounting ar | were charged to any one, one or all three of those cc Hr. Wright: I object 1 please. : | Mr. Gardiner: On crc 1 raised several times as I worked for one of these J he sold material for thei feet or -attempting to hri if worked for those various ; :| by one company, j Mr. Wright; The que was such an arrangemei I Trial Examiner Nor objectionable for severe him what could have pc such a situation could leading question. I thin | may bring out just exj some other question. ; By Mr. Gardiner: ; Q. Were you at all t national Smelting & B< A. As I recall 3579 International Smc Q. Eoyoukni your salary between tl worked? ; A. There may not dings. ;ion overruled ie question, please? Jad.) Joada -white lead will Ip. you advertise that | ime. ' stimate of what that j ive-year period t. * from 1933 or *34 to j inything to do with d Industries Assoeif ;al. I believe that I campaign to further the association? d I believe, we dis- 1 ever taking place es Association with vhite lead as whiter r presence? iussion of it in that ir meeting at which el Jstions. Gardiner our activities as a any products for med besides white Testimony of Frank H. Hurless. 1895 A- Will you repeat the question, please? Trial Examiner Norwood: Read it. (The pending question was read.) A. When I was a salesman selling dry white lead and white lead in oil, I also sold zinc oxide. By Mir. Gardiner: Q. Over what period did yon sell zinc oxide? A. Well, I sold zinc oxide for the same period of time that I sold lead pigments. Q. Ton have testified, Mr. Hurless, that you have made sales on behalf of Anaconda Sales Company, Anaconda Lead Products and International. So far as you know, 3578 was there any reason why there could not have been a cost accounting arrangement so that your services were charged to any one, segregated and charged to any one or all three of those companies? Mr. Wright: I object to that question, if Your Honor please. Mr. Gardiner: On cross-examination the question was raised several times as to whether or not this witness worked for one of these companies, and he testified that he sold material for them. I am merely bringing out the fact or attempting to bring out the fact that he could have worked for those various companies and been compensated by one company. Mr. Wright: The question wasn't whether or not there was such an arrangement. # Trial Examiner Norwood; I think the question is objectionable for several reasons. One is that you asked him what could have possibly been there, whether or not such a situation could have obtained, and also it was a leading question. I think I will sustain the objection.^ You may bring out just exactly what the circumstance is by some other question. By Mr. Gardiner: Q. Were you at all times at East Chicago paid by Inter national Smelting & Refining Company? A. As I recall, the pay checks were those of the 3579 International Smelting & Refining Company. _ Q. Bo you know if there was any allocation as to your salary between the various companies for which you worked? ._ A. There may not have been any direct allocation of b t !- 1896 Transcript of Proceedings. jsjawlairyy,, bbuutt my understanding is that we would eharce tt#otIr_for example, the Aaaconda Lead Products CoS seme ^ the" TOnM > ^ 1 that, Your Honor, as to what Mrad(5arrdbfrg Tf vHe Vot tes?^ as to faSs. " , '.trainer: If Your Honor please, there was a Int nonfteesrstiatmanodjna'yngbsy, this witness beliefs, and sbbooottfhhorootnnh.ddiirreecctt aanndd cwrnoosos as to L ,, ^5' are *aHdng about something which mn be ascertained correctly, Your Honor. This is Jot? ?eedf be Pjoved by speculation. Trial Examiner Norwood: Objection overruled. By Mr. Gardiner: you sold white lead in oil in the car zone Sn^hlf zl?tl0-n WaS t0 the fre%M t0 tbe pointe AA. q. A. \r ?,e ln computing your price? No consideration was given to it. ^id y0a arrive af yar Prices for the par zone? zone were aJd am\ed at oar Prices for the par hmg W?at our competitors7 prices o ia S tin` onr prices accordingly. **** "5re yor sales of white lead in oil at any time A uapited o h the basis of yoar freight rates f 7 tio|; wKil0" frei8ht t0 a desW M^paid ae *" fKra East lead A. w3he? a ^stomer purchased white *,d % ?ay for it, above the list price? Pat zone wa?SE& 5| " **J" the teium, that is whatta Vonndeon- ^what he paid, less his cash disconnt if he o i"T"" ,? casb discount period. ceSionSftTKdS?4 ^ ,in the other zones' with the ex- A. mat iVcSS ^ WaS appUed WltMn tbose zones thS' jotimmlXoS ^nfan5W<ir t0 * *}ue8tion> yu said *T * e0mpntias tea was^f'TC^ere^fnH6 ^Ue^n;. I had in mind was, ix we were figuring production costs, for example, I Testimony of Frank H. I for onr own use, we would take a; average selling eost in figuring those ; m establishing cmr prices to the oust always based on competitive ] 3581 figure them by including the frt Q, So that when you say yc ia computing costs, that was mere determining whether or not yon wei : or a loss or how much of either; is A That is correct. Mr. Gardiner: May we have a ri of time, Yonr Honor? Trial Examiner Norwood: How Mr. Gardiner: Three minutes. Trial Examiner Norwood.* Wei . recess. (A short recess was taken.) Trial Examiner Norwood: Th< I order. j By Mr. Gardiner: q. In the sale of white lead j with a similar material produced A. Yes. Q. In yonr opinion, how did the standpoint of quality? A. We considered that our > t that of the National Lead Compi up in our advertising. Q. Was there any price 3582 material that you sold and tf A. We sold at a quarter! at which National Lead Company OlL Trial Examiner Norwood: Wh The Witness : I would say ihs fairly well established in the lead: By Mr. Gardiner: ' Q. And what was the reason; * a cent below National Lead? I A. We sold our lead in oil a q | price of National Lead Oompani that time was a comparatively dings. lat we would charge a Lead Products Com- It vhich there would be S' or Honor, as to what :ying as to facte, ease, there was a lot j j , lirect and cross as to )ut something' which Conor. This is not a speculation, ion overruled. pil in the par zone, .reight to the points >rice? ;es for the par zone? r prices for the par competitors* prices dingly. ad in oil at any time eight rates? reight to a destina- FV s freight from East er purchased white i the list price? ite lead in oil in the or 100 pound eon- Jash discount if he ; | I ; i zones, with the ex- } within those zones ? , ejection, you said dght in computing hat I had in t o Lm? costs, for example. Testimony of Frank H. Hurless. 1897 for our own use, we would take an average rate or an average selling cost in figuring those production costs. But in establishing our prices to the customers, our prices were always based on competitive prices, and we did not 3581 figure them by including the freight charges. Q. So that when you say you figured freight rates in computing costs, that was merely for the purpose of determining whether or not yon were operating at a profit or a loss or how much of either; is that correct? A. That is correct. Mr. Gardiner: May we have a recess for a short period of time, Your Honor? Trial Examiner Norwood: How long do you want? Mr. Gardiner: Three minutes. Trial Examiner Norwood: We will take a three minute recess. (A short recess was taken.) Trial Examiner Norwood: The hearing will come to order. By Mr. Gardiner : Q. In the sale of white lead in oil, did you compete with a similar material produced by National Lead? A. Yes. Q. In yonr opinion, how did those two compare from the standpoint of quality? __ A. We considered that onr quality was superior to that of the National Lead Company, and we played that up in our advertising. Q, Was there any price differential between the 3582 material that yon sold and that of National Lead?^ A. We sold at a quarter of a cent under the price at which National Lead Company sold. That is for lead in oiL _ Trial Examiner Norwood: When was that? All the time ? The Witness: I would say that it was after we became fairly well established in the lead in oil field. By Mr. Gardiner: Q. And what was the reason you sold for a quarter of a cent below National Lead ? A. We sold onr lead in oil a quarter of a cent below the price of National Lead Company because we had what at that time was a comparatively unknown product-- 1898 Transcript of Proceedings. Trial Examiner Norwood: I think we went into that this morning and explained that fully. Mr. Gardiner: Very well. Mr. Wright:: We have gone into that fully. By Mr. Gardiner: Q. Bid you compete in the sale of white lead in oil with Eagle-Picher! A. Yes. Q, What, is your opinion, was the quality of their pro duct with relation to yours ? _ A. I do not think the qnality of the Eagle-Picher white lead in oil was as good as ours, particularly as regards 3583 color. Q. Did you sell it on the same basis as EaglePicher? A. No; we sold onr lead at a quarter of a cent per pound under the price Eagle-Pieher charged for their white lead in oil. Q. And why was that? A. For the same reason that we sold under the price of the National Lead Company. The Eagle-Picher prodnet was not as well accepted and as well known as the National Lead Product, but it was a very well known product as compared to onr comparatively unknown product. Mr. Gardiner: That is all. Recross-Examination by Mr. Wright. Q. About this understanding that you have that your services can be had by other Anaconda subsidiaries and lulled to those subsidiaries, will yon go into that further! A. I cannot say that I know what the arrangement was there. But I think that, for example, the sales department would, each month, assess the white lead department, the lead in oil department and the zinc oxide department with a certain amount of selling expense for each department. Q. Those are departments of International now that yon are speaking of? A. Yes. 35S4 And the same would be true of the Anaconda Lead Products Company. Tj Q. All rigk that was done A. I could t regards Anaed definitely Iknd of Internationi Q. But not A. I canno! definitely say Q. Where i A. In Nevi Q. 25 Broi A. Yes, sij Q. That M such as Coma A. At thsj Broadway, bo and was in th manufacture: Q. I call 1 1939. It sttmj A. That i q. i 3585 Mining A. 1 Q. Now, your expert these pigme panyis cone follow what A. Our i doing. i Q- "Yes. i as the dry j A. Yes. i Q. And. was in effed per hundrei A. That Q. Ton of-- Mr. Gar conclusion t ceedmgs. :hink we went into flto that fully, of white lead in oil ^ ;he quality of their i the _ _ , particularly as regards same basis as Eagfe. quarter of a cent jg? charged for their* sold under the priced igle-Picher productms mas the National Lead n product as compare! duet. Mr. Wright. ^ it you have that yon | onda subsidiaries and f go into that fnritr? r the sales departaed I; lead department, ife jp 'side department t sS . f;: or each department national now that pa ] >f the AnacondaLeai > .f Testimony of Frank S. Hurless. 1899 Q. All right. Is that conjecture, or do you know that that was done as to Anaconda Lead Products .Company? A. I could not definitely say that I know it was done as regards Anaconda Lead Products Company, hut I can say definitely I know it was done as far as the other departments of International were concerned. Q. But not outside of International? A. I cannot definitely say. I believe it was, but I cannot definitely say so. Q. Where are the main offices of International? A. In New York City. Q. 25 Broadway? A. Yes, sir. Q. That is the office that is listed here on the price card such as Commission's Exhibit 661-Z-193, as a district office? A. At that time, we had a district sales office at 25 Broadway, hut later it was moved to the Graybar Building, and was in the Graybar Building until we discontinued the manufacture and sale of lead pigments. Q. I call your attention to 61-Z-194, which is in October, 1939. It shows the district offiee at 25 Broadway. A. That is correct. Q. That is the main office of the Anaconda Copper 3585 Mining Company, is it not? A. Yes, sir. Q. Now, do I understand, Mr. Hurless, that it has been your experience that you have been handling the sale of these pigments, and that your prices as far as your com pany is concerned, are set by your competitors ? That is, you follow what your competitors do? A. Our prices were based on what our competitors were doing. Q. Yes. And those have been the same prices in so far as the dry product is concerned? A. Yes. Q. And the difference between that and white lead in oil was in effect that you would compensate the dealer 25 cents per hundred more than your competitors; is that correct! A. That is correct. Q. You consider that your company has had freedom of-- Mr. Gardiner: If Your Honor please, I object to that conclusion on the part of attorney for the Commission 1900 Transcript of Proceedings. there. He says that we in effect give the dealer a compen sation of 25 cents on the dollar more. This witness has testified that there is no limitation on what the dealer sold his material for. Whether or not he elected to sell it for the same price as our competitors or at a different price was entirely in his province. Mr. Wright: I used the words in that question, 3586 Your Honor, that the witness used himself on his direct testimony this morning. Trial Examiner Norwood: Objection overruled. By Mr. Wright: Q. Do you consider that your company has a complete freedom of action in this industry as far as prices are con cerned? _ A Well, we set our own prices. Q. Well, now, yon stated with this one exception that they are the prices that are set by your competition. A. Well, we had the same prices that they were charg ing, with that one exception. Q. That is what you mean by freedom of action! A. We were free to do as we saw fit to do. Q. In other words, then, yon could have set prices lower if you had wanted to, or on a different basis, if you had wanted to, on these various products? A. Any limitation was really due to conditions such as costs and so forth, not on the part of our competitors. Mr. Wright: No further questions. Mr. Gardiner: That is all we have for Mr. Hurley as far as the International Smelting & Refining Company is concerned, and Anaconda. We have no further witnesses at this time. We would however, like the privilege at a later 3587 date of introducing further testimony. Mr. Wood: I will have four witnesses tomorrow and Thursday._ I would not elect to proceed today. Thial Examiner Norwood: Is there anything further to come before the Commission today? (No Response.) Trial Examiner Norwood: The conclusion is obvious, that we recess until 10 o'clock tomorrow morning. The hearing is adjourned until that time,. (Thereupon, at 3:20 o'clock p. m., the hearing was re cessed until 10 o'clock a, m., Wednesday, September 17, 1947.J . . Colloquy. 1 35 Hearing Ro< Federal Tra Washington September . Met, pui rsuant to adjournment, at 1C Before: J W Norwood, Trial Examine James D. Ewing and E. Z. I> the Respondent National he (120 Broadway, New York, . Edmund T.-Wood and Richm for the Respondents Eagle-- and Eagle-Picker Sales Co; (American Building, Cincin 3589 Henry E. Gardiner, Attorney Anaconda Copper Mining < fional Smelting & Refining < (120 Broadway, New York. James T. Welch, Attorney fe Sherwin-Williams. Company (81515th Street, N. W-, W Joseph S. Wright and Paul I the Federal Trade Commis 3590 PROCEEDING Trial Examiner Norwood: The order. . * Pursuant to adjournment on ye Docket5253 is now reconvened for. evidence on behalf of Tesponden Federal Trade Commission, Wa o'clock a, m. on the 17th day of fcv The appearances axe as follow! Edmund T. Wood and Rich Eagle-Pichei Company Company. , James D. Ewing and -m. - National Lead Company*