Indianapolis Times, Indianapolis, Marion County, 13 December 1938 — Page 10

PAGE'10 __

Ball and Two Other Firms

' Monopolize Fruit Jar Making,

O’Mahoney

Milk Bottle Industry Also)

Under Close Control, Witness Reveals.

WASHINGTON, Dec. 13 (U. P.).— The Temporary National Economic Committee today investigated testimony that three firms monopolize the control of fruit jar manufacture. One of them is Ball Brothers, Muncie, Ind. and the other two are the Owens-Illinois and Hazel-Atlas glass companies, F. G. Smith, Hart-ford-Empire Co. president and first witness in the committee's inquiry into glass container industry, said yesterday. Mr. Smith disclosed under questioning that his firm not only has a monopoly on patents for one of two methods used in high speed proauction of glass containers but also controls the milk bottle patents.

40 Million From Patents

He said yesterday his company has earned $40,479,026 from its patents alone during the past 15 years. during the past 15 years. "Regarding the milk bottle industry. Mr. Smith testified that 10 companies have been granted licenses to manufacture the product and that only Owens-Illinois, Thatcher and Liberty glass companies are permitted to produce bottles in any quantity under Hartford-Empire patent licenses. Huzh B. Cox, special assistant to the A.torney General, conducted the questioning and told the committee that Mr. Smith’s firm licensed 65 to 67 per cent of the glass container output in 1937 and that the OwensIllinois patents were responsible for 29.2 per cent of the industry’s production. Only 4 per cent of glass containers produced in America are . manufactured outside of processes controlled by the two firms, he said. Congressional and Justice Department officials on the Committee clashed today over further questioning of Hartford-Empire officials. Mr. Cox charged that HartfordEmpire “sues everyone sooner or later” and Rep. Hatton Sumners (D. Tex.) and Senator King (D. Utah) challenged the inference. Assistant Attorney General Thurman Arnold upheld Mr. Cox, but Mr. Cox agreed to continue his questioning on “less controversial” topics. Mr. Smith, who was accompanied by A. T. Stafford, secretary-counsel of Hartford-Empire, testified that his firm controls patents on the high-speed, mass production process of glass container production, known as the “gob type.” This and OwensIllinois’ “suction feeding” process are the only two economical methods of producing containers.

“Developing Company”

Discussing the company’s patent policies with Mr. Cox, Mr. Smith said that the glass container manufacturers who pay royalties to his firm for use of its machinery “look upon us as a developing and engineering company that is going to keep them abreast of the industry.” He added that the firm has a “deep sense of obligation to protect” licensees and “keep them in business.” : Of the 15-year Hartford-Empire earnings of $40,479,026 from patents, Mr. Cox said, $35,944,026 was de‘rived from royalties and $4,535,036 from licenses. He presented tables to show that 90 per cent of the firm's income since 1932 had been derived from these two sources. He contended that his. company was interested in maintaining low prices for glassware, but Mr. Cox asked him whether he believed that if manufacturing firms did not have to pay royalties to Hartford-Em-pire they could produce and sell their goods at lower prices.

Two Limits Imposed

“If they didn’t pay. us royalties, they would not have our equipment and would have to go out of business,” Mr. Smith said. “That’s the first time that I've got you to admit that they must use your machinery,” Mr. Cox replied. : Restrictions applied by the Hartford firm sometimes limit quantity of production and at other times the kind of glassware produced, Mr. Cox told the committee. Ball Brothers officials have been subpenaed to testify before the committee.

Committee Told Glass Container Patents Example of “Toll Bridge’

By RAYMOND CLAPPER Times Special Writer

WASHINGTON, Dec. 13.—How and where are you going to draw a

effects?

found in others. The committee is not looking for a law violator. In fact, one member, after hearing some of the glass testimony, said he doubted if anything mentioned transgressed the law and. that the same practices were common in other industries. Yet the Committee was given a picture of a huge and vital industry, tightly controlled, in which it is actually impossible for new competitors' to enter the field without the consent of the two dominant patent-controlling groups. In the manufacture of milk bot-

tles, fruit jars and all kinds of glass containers, only 4 per cen of the production comes from independents—there are three. The other 96 per cent is produced either by the Owens-Illinois Co., or by licensees of the Hartford-Empire Co., which is a concern primarily engaged in owning glass making patents and in licensing them under controlled conditions, leasing the essential machinery to manufacturers on a royalty basis.

Owns 717 Patents

You probably never heard of the Hartford-Empire Co. before, yet the milk bottles which are opened in every kitchen in the land each morning are made only subject to the permission of this company. A Delaware corporation, the Hart-ford-Empire’s headquarters are at Hartford, Conn. Its chief property consists in 717 patents mostly glass making, and royalties from these patents provide 90 per cent of the company’s income. It has an experimental plant for research, but makes no glass for sale. k It makes no machinery, but hires other concerns to manufacture glass-mak-ing machines which it rents, never sells, to container producers. Its assets total 11 million dollars. Only one other concern owns practical glass container making patents — the Owens-Illinois — and that concern has not issued a license to anyone since 1914. Therefore, for nearly 25 years, anyone who wanted to manufacture glass bottles

depend upon being able to rent licensed machinery from HartfordEmpire. Officials of the company use their discretion as to the licensing of new competitors and for some years have discouraged any expansion of glass-container manufacuring capacity.

Production to Fit Demand.

“You have been operating a kind of AAA for the glass industry,” observed Chairman O’Mahoney (D. Wyo.) dryly. By patent control, it was possible to do what farmers couldn’s do—curtail production to fit demand. So out of the patent privilege which is granted to the investor, there grows up, in an entirely legal way it may be granted, a large corporation which exercised remote control over the manufacture of articles which, under our standard of living, have become household necessities. There has been built, in the manufacture of milk bottles, medicine Kgttles, fruit and vegetable jars, what Assistant Attorney General Thurman Arnold calls an “economic toll bridge” to which veryone must pay tribute. In addition, such patent holding companies sometimes buy up patents and suppress them, refusing to permit anyone to put them into production. The patent privilege, granted in order to encourage the useful arts, becomes the means of suppressing developments. These two problems—the control

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line between rewarding an inventor for his idea and preventing the patent on it from being used in a way that produces undesirable economic

That is the question upon which the Temporary National Economic Committee is seeking light this week in its study of the glass container or bottle industry. This industry is used as a case illustration of conditions

of industry and competition through patent licensing, and the suppression of inventions—are recognized as needing attention. Yet the Committee members likewise recognize the necessity of protecting the inventor so that he may obtain the reward of his work, and in whatever is proposed that need will be recognized.

FRANKLIN PLAYERS

T0 GIVE ‘STAGE DOOR’

Cast Members Listed for Presentation Thursday.

Times Special * FRANKLIN, Dec, 13. — “Stage Door,” popular screen and stage drama, will be presented Thursday evening in the Franklin College auditorium by the Franklin College Players under the direction of Prof. Ted W. Hatlen, speech instructor. The play has been in production for a month. Included in the cast are the Misses Jean Van Vorrhees, Indianapolis; Iris Puett, Hammond; Phyllis Lowe, Lebanon; Veretta Sutton, Muncie; Verna Holmes, Brownstown; Betty Bills, Chicago, IIL; Mary Richardson, Greenwood; Margaret Draim and Harriet Grayson, Vincennes; Margaret Thompson, New Castle; Eva Marie Sanders, Danville; Eleanor Monesmith, Ft. Wayne; Helen North, Rising Sun, and Jeanette Brown, Margaret Dill, Betty Flinn and Rachel Saunders, Franklin. Also included in the cast are Louis Lind, Edinburg; Kempton Smith, Nutley, N. J.; Marion Barringer, Bluffton; Robert Hutchings, Terre Haute; Steve Igrison, Detroit, and William George, Indianapolis, Miss Barbara Ann Wheatcraft of Greenwood will serve as stage manager. Miss Dill is to have charge of properties and Robert Lett of Franklin will supervise lighting.

CIVIL WAR WIDOW IS 108 LOGANSPORT, Dec. 13 (U. P.)— Mrs. Rebecca Kerns, who lies on a monthly old age assistance income, observed her 108th birthday yesterday. She is the widow of William Kerns, a Civil War veteran, but’ she never has been able to establish the service record of her late husband and consequently never has drawn a Civil War widow’s pension.

~o=cwse=' THE INDIANAPOLIS TIME

Ends Suspense

Forestalling threat of the Washington University varsity ball committee to hand suspenders to any girl appearing in a strapless evening gown, Rae Samuel came to the dance in Seattle already equipped.

dramatics and;

CITY STREETS ABOUT, CLEARED OF LEAVES

If the weather just stays until tomorrow night, the City will have won its battle with the fallen leaves. A freeze would stop the work. With noticeable tension, Fred Eisenhut, City Street Commissioner, made this announcement today. He said the Street Department's 30 trucks and 25 more trucks borrowed from the Sanitary Department were making their last offensive on the leaves today and tomorrow.

TEETOR FIGHTS TAX PROPOSAL

Hoosier Blames C. I. 0. for Profit-Sharing Plan’s Failure.

WASHINGTON, Dec. 13 (U. P.) — An Indiana auto parts manufacturer today told a Senate Finance Subcommittee that business should be permitted to develop profit-shar-ing plans without Government regulation. Lothair Teetor, Perfect Circle president, Hagerstown, Ind., said his company operated profit-sharing plans in plants at Newcastle, Hagerstown and Tipton, Ind, until workers organized under the C. I. O. and demanded wage increases commensurate with the profit-sharing dividends. Mr. Teetor testified as the subcommittee entered its concluding session of public hearings and prepared to write a report for Congress as to feasibilities of encouraging profit-sharing plans by granting tax concession. The committee is composed: of Senators Herring (D. Iowa) and Vandenberg (R. Mich.). Mr. Teetor asserted that failure of the plan in his plants was due to the “hatred” caused by industrial conflict and failure of ‘employees

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