agents of the said several successive corporations, conspiring and confederating together, have maintained a department of each and every of said successive corporations for the purpose of stifling and suppressing competition with them respectively. This department was sometimes called the "Competition department," at other times the "Ways and means department," and at other times by various other names. It was composed of an active head, with other officers and departmental managers of the said several corporations. It employed a force of special men who were particularly instructed and directed to suppress and destroy the business of competitors engaged in interstate and foreign trade and commerce, and to harass and discourage and force out of business such competitors who were either manufacturers, dealers, or agents.

These special men were generally known as "knockout" men, and were employed for the special purpose of interfering with the negotiations of the contracts of sales of such competitors. The said department also employed secret agents who were instructed and directed to spy upon the business of such competitors, to fraudulently obtain information as to their sales and shipments, and to report such information to said department, where it was used for the purpose of discouraging prospective purchasers of others.

Other secret spies and agents were from time to time employed by said department, with instructions to report the names of customers of such competitors, and to report other information, which was thereupon used by said department in blocking, and in securing the rescinding, of contracts of sales by such competitors, and wrongfully interfering with their business.

The said department, from time to time, wrongfully and secretly engaged the services of the employees of such competitors and instructed and directed them to furnish to said department confidential information concerning the business of such competitors; and such information, when so reported, was used by said department in unlawfully and fraudulently obstructing and suppressing such trade and commerce of such competitors.

Such department, from time to time, sent out instructions to the agents of the said several successive corporations, advising and directing them how to manipulate competing -, for the purpose of showing defects and for the purpose of discouraging users of such, and for the further purpose of having such users rescind their contracts of purchase.

The said department also, from time to time, instructed and directed its agents to purchase information from agents and employees of competing manufacturers and dealers relative to the business, plans, and customers of such competitors, and to procure information from the employees of railroads, express companies, hotel companies, and others as to the plans and purposes of competitors and the shipments of their, and to report such information to said department, where it was used in obstructing and suppressing such trade and commerce.

All of such instructions and directions as above set forth were acted upon by such agents so receiving them, and the policy and plan of the defendants operating said successive corporations through said department was by such agents carried out.

EXHIBIT 2

COMPANY 1

The Government alleges that:

It appears from the evidence that the T———

Company has a general statistical department with headquarters at one of the chief functions of which is to keep accurate records of the volume of business done by competitors, and that the information regarding shipments and business of competitors, secured from railway sources, is all reported ultimately to this central office. The Government had much difficulty in securing from the officers of the TCompany an admission even of the existence of this statistical department and of the fact that such records of the business of competitors were kept. Two or three witnesses who had charge at New York of the sales of the various marketing companies in different parts of the country admitted after much questioning that, from the central offices of those companies in other places, reports of competitive shipments were sent to them. at New York; but they at first denied knowledge as to what became of such reports after they had once examined them. (, vol. ——, pp. 670 et seq.; vol. —, p. 681.) Thus

who territory until 1900, and

Com

had charge of the sales in the later had charge of the sales in the territory of the pany and the T of Iowa, admitted receiving such reports from all these territories, but claimed that they were destroyed from time to time, and that he had none except for a very recent period. He 1 1 Op. cit. U. S. v. for U. S. Vol. pp. 589-91.

Company.

said nothing about their being turned over to the statistical department, as subsequently appeared to be the case.

pp. 679-87.)

Finally it was learned from the testimony of — — selling agent at New York for the —

vol.

the

Company of Kentucky,

that the reports of this character which he received from the

who had charge of

, PP. 709-10.) The

(vol.
under

was then in

of Kentucky were turned over to the statistical department at Government finally found that charge of this statistical department. He was called as a witness, and admitted that such reports of competitive shipments were turned over to his office, and that from them he compiled general statistics showing the volume of competitive sales in each general marketing territory of the T- Company, and also in its smaller subdivisions, and in the principal towns throughout the United States. (, vol., pp. 829-32.)

The Government secured from -'s office, and introduced in evidence, copies and extracts from these records showing the volume of competitive business. (Petitioner's Exhibits 387-90, vol.-.) It also procured from the various sales agents having their headquarters at —namely, —, representing the and the Company; tucky; —, representing the of Indiana; Company; and

representing the

of Iowa of Ken

representing

representing the

of New

the Jersey-the current reports received by them from their several companies showing individual shipments of competitors, and also summaries thereof showing the total competitive business for certain recent periods of time. Copies and extracts of some of these records were put into evidence, and constitute Petitioner's Exhibits 313, 319, 329, 341, 342, 343, 344, 353, 354, and 355 (vol. —). To illustrate the form of these reports of competitive shipments, we call attention to Petitioner's Exhibit 313 (vol. —, p. 700), which is a list of shipments of by competitors in the territory of the

Company (Rocky Mountain States) during certain months of 1907. The first column (see vol., pp. 687, 739) shows the date of the shipment; the second, the consignor; the third, the point of origin; the fourth, the consignee; the fifth, the point of destination; and the other columns the character and amount of

in the shipment.

Petitioner's Exhibits 387-390, which are the summarized records produced by, show how complete is the system of keeping

track of competitive business. They cover every marketing territory of the TCompany in the United States, showing the volume of business done in such territory by the T- Company the volume done by independent concerns, and the corresponding percentages. They also give similar figures for the smaller marketing districts in which the larger territories are divided, and likewise in many cases give separately figures for the main stations and for the substations under such main stations. We have already, in discussing the relation of the extent of competition to the prices charged by the T— Company, presented these percentages

of competitive business.

vol.

vol.

and other sales agents who produced these papers testified that they did not know how this information regarding competitive shipments, which came to them from the head offices of the several companies, was originally procured by those offices. p. 671; vol. —, p. 687; —, vol. —, p. 709; pp. 758, 759; -, vol., pp. 818-825.) None of them directly testified that they knew that the reports did not come originally from railroad employees, though said he had been assured they did not. (Vol. —, p. 687.) In the Missouri case in 1906, however, C. P., general manager of the Company, practically admitted that that company got such information from railroad employees, and paid for it (vol. -, pp. 1109-11.)

GROUP 4

EXHIBIT I

EXPLOSIVES TRADE 1

Q. I will ask you whether or not, if you know, there was any contest inaugurated against the King's Great Western Powder Co. by the associated companies, in which you took part and assisted? A. I was sent to Cincinnati by The Hazard Powder Co. by direction of R. L. Wheeler, the president, when a branch office was established, and he told me the chief part of my work would be the conducting of a fight against the King's Great Western Powder Co. Mr. Wheeler was then vice president, and not president, as I have just stated.

1 Op. cit. U. S. v. E. I. du Pont de Nemours and Company. Testimony of R. S. Waddell. Pet. Rec. Testimony, Vol. I, pp. 99 ff. The instance given here is taken from the period when the explosives trade was operating under a pooling agreement and before the consolidation into the present combination.—Ed.

Q. What did you do?

A. I opened an office at Cincinnati. The price of rifle powder was then held at $6.25 per keg, less a rebate, or discount, to city trade, of 5 per cent, say $5.94 net. I opened the fight by reducing the price, on Mr. Wheeler's instructions, to $5.80. I made as much trade as I could at that figure.

Q. State whether, if you know, The Hazard Powder Co. had any trade in that locality at that time at all?

A. It had a very small trade throughout that section of the country.

Q. Who made the first cut in price, if you know?

A. The Hazard Powder Co. That was on rifle powder. There had been a fight in progress on blasting powder before that time; but the King Co. had only recently commenced the manufacture of rifle powder.

Q. Who took the trade, if you know, on that price?

A. The Hazard Co. took the most of the trade of the city; the merchants.

Q. How was that cut met, if you know, by the King people, if at all?

A. It was met, within a day or two, by Mr. John King himself, who came to the city and made a lower price. The price was seesawed between us at about 10 cents per keg, every few days, until the price had gotten down to about $3.75 or $4, when I was called to New York.

Q. By whom?

A. By the Hazard Powder Co., or the officers of The Hazard Powder Co. for a conference.

Q. With what person there did you have a conference?

A. R. L. Wheeler, who was the acting head of the company, directing the business.

Q. State what that conference was?

A. We discussed the situation at Cincinnati. He expressed a desire to hold the trade, even though the price might go very much lower than we were then making, and asked my opinion as to the best means of doing this; and I recommended a plan that I thought would be effective.

Q. What, if anything, were you instructed to do?

A. I had general instructions to make a price lower than any that had been quoted in the city, to the city trade in Cincinnati.