Document jm3dYDeYLMLxDQNZN6x2w5652

FILE NAME: Friction Materials Standards Institute (FMS) DATE: 1947 Aug 22 DOC#: FMS081 DOCUMENT DESCRIPTION: Newspaper Article - US Jury Indicts Brakelining Group U.S. JURY INDICTCS BRAKE LINING GROUP New York Times (857-Currentfile); Aug 22, 1947; ProQuest Historical Newspapers The New York Times (1851 - 2004) PB- 22 U. S. JURY INDICTS M KELIM G6R0DP ' ' , / . - ; ; '=- , 20 Manufacturers of Materia! Accused of Violating Laws for Prevention of Trusts . Tweijty m anufacturers of re placem ent brake and clutch lining m aterials, who account for 96 per cen t o f th e n atio n 's production, were indicted yesterday by a Fed eral grand jury on charges of vio lating an ti-tru st laws. They w ere named- in three indictm ents along w ith fifty-three individuals and the Brake Lining M anufacturers Asso ciation of 370 L exington Avenue. The indictm ents, two involving domestic sales and one export sales, accused the defendants of a con spiracy to fix prices, trade dis counts and other trade practices for the purpose of eliminating competition. The B rake Lining M anufacturers Association was de clared to be the agency through which the defendants effected the alleged violations. ' The indictm ents represented the fo u rth attack upon big business by :G overnm ent agencies th is w eek. The F ederal Trade Commission made charges of illegal practices against th e steel industry while the D epartm ent of Justice filed anti tru st charges against the autom o bile tire industry . and th e color motion picture industry. a vastly improved technogolical product over the -pre-war product. T hrough expensive research :and developm ent a 'much m ore efficient product has been m ade Available t 1m otorists, affording greater public safety a t a negligible ad vance in cpst-h,' The corporations indicted w ere: A m e ric a n B ra k e Shoe Company, D e tro it. ; ' -};. ' A sbestos -M anufacturing Company, H untington, m a . B endix A viation C orporation, D e troit. ' . . F ibre and M etal P roducts, Inc., Downey, Calif. ' . F irestone Tire and R ubber Com pany, Akron. - F irestone T ire and R ubber E xport Company, Akron. G atke C orporation, Chicago. .G eneral M otors C orporation,. De troit. . Grizzly M anufacturing Company, Bell; C alif. - Johns-M anville Corporation, N ew Y ork. ". Johns-M anville International Cor poration, New York. Lasco B rake Products Corporation, L td ., O akland. Calif. L. J. M iley Com pany, Chicago. F h a ris Tire and R ubber Company, Ridgew ay, P a. R aybestos-M anhattan, Inc., F as- saie, N . J. R ussell M a n u fac tu rin g Co., M iddle tow n. Conn. Scandinavia B elting Com pany N ew ark, N. J. feoutbem Friction M aterials Corpo ra tio n , C h a rlo tte , N . C. Therm oid Company, Trenton, N. J. W orld B estos Corporation, P ater son, N. J. Surprised a t Charges L ester D. Stickles, general coun sel of the indicted trade associa tion, said th a t he w as aw are th a t the association had beeh under in vestigation for two years, but was "surprised' th a t alleged_violations of the an ti-tru st laws are charged by the grand jury." ."Of course," Mr. Stickles con tinued, "the grand jurors heard only one side of the m atter and, therefore, w ere not in possession of the full facts. The grand jury has even gofie so fa r as to indict dead persons. The individuals, cor porations and the association m entioned in th e indictm ent will fight vigorously to protect them selves in reference to these claimed violations." Mr. Stickles said th a t the prac tices in the industry are of long standing, going back to the N a tional Recovery A dm inistration days, and have been open and well-known. He said he w as un able to understand "w hy big busi ness should be attacked along crim inal lines when it w as only too happy to abide by the laws." He declined to identify th e deceased m anufacturers who w ere indicted. $4:5,000,000 Y early B usiness A tto rn e y G eneral Tom C. C lark said th a t the replacem ent friction m aterial in d u stry does a $45,000, 000 annual business and th a t the pricing and other trade practices especially affect Federal and S tate Governments, m unicipalities and other large operators of autom o tive equipment. He noted th a t because of the continued use of old vehicles, the replacem ent friction, m aterials are an essential to highw ay safety. I t w as noted also th a t the defend ants, through manipulated price and discount lifts, caused the m a terials to be sold abroad a t prices cheaper than those in the U nited S ta te s. John F. Sonnett, assistant A t torney G eneral in charge of the A n ti-tru st Division, said th a t re placem ent brake linings are five tim es th a t of new equipm ent and added th a t the cases should "pro mote safety on the highways by enabling the public to purchase brake m aterial a t fair competitive prices." H e said th a t J o h n . M. M urtagh, Commissioner of Investi gation for New York, had cooper| ated by furnishing significant facts on the cost of these m aterials for am bulance, fire, police, sanitation | and other city equipment. ! Vincent A. Spina, president of [the B rake Lining M anufacturers :Association, described as "prepos terous" the assertion by Govern im ent officials th at the anti-trust Iactions would prom ote highw ay Is a f e ty . [ "The brake lining and clutch facing business is one of the m ost in ten sely com petitive businesses in the country," he asserted. "Profit m argins are alw ays narrow and, although since 1940 basic m aterial icosts have increased approximately 50 per cen t and labor costs are up about 80 per cent, the prices for these m aterials have advanced or. an a v erag e of 12 p er cent, although the OPA itself authorized a n in crease of a s high as 15 per cent." Mr. Spina said th a t the m anu fa c tu re r to d ay receives a b o u t $2.50 for the brake lining and clutch facings used to reline the popularm ake cars. Furtherm ore, he said, this brake lining which contributes so m uch to the public safety "is Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.