How To Succeed In Bilking, Etc.
Widick, B. J.
THE GENTLEMEN CONSPIRATORS, by John G. Fuller. Grove Press, Inc. $3.95. In one of his lively discourses on contemporary socioeconomic trends, Professor James Riddle Hoffa, summa cum laude,...
...The eight largest petroleum companies hold 56 per cent of that industry...
...Aren't these companies in competition...
...Poor son of a bitch steals a loaf of bread, gets two years in jail working on the sand pile...
...Fuller makes this point: "Exactly six months before this date in May 1959, when Cordiner was speaking so rapturously about GE pricing policies, seven of his highest executives were meeting with their competitors in the Hotel Traymore at Atlantic City, N.J...
...It is assumed that companies in in dustries affected by this bill have the ability to 'administer' [meaning rig] prices in a manner not responsive to market supply and demand...
...get to the top or else you may become a scapegoat...
...In hearings in 1959 on price increases Senator O'Mahoney of Wyoming summarized the status of big business this way: the eight largest steel companies did 70 per cent of the business...
...The responsible heads of Westinghouse and General Electric were never found guilty: They were never indicted...
...There is a moral to the story of the electrical industry...
...I.T.E...
...you steal a couple of hundred millions like those characters in the electrical industry, and you get thirty days...
...And they never would have gone to jail at all except the judge was vindictive and wanted to pretend everybody got treated alike...
...to see to it that a high cost item ($125 million annually) known as the switchgear assembly would be jacked up in price, and that sealed government bids would be sliced up and given on a platter to each of the conspiring companies in this ratio: GE, 42 per cent of the market...
...A obvious question faced the Senate hearing...
...The gap between the real world of business and the economics of the classroom may be judged by contrasting pages 136-37 of Fuller's book with Paul Samuelson's chapter on determination of price by supply and demand in his text on economics...
...How long would they have stayed in jail...
...An important witness was Cordiner of GE...
...9 per cent...
...In one of his lively discourses on contemporary socioeconomic trends, Professor James Riddle Hoffa, summa cum laude, of the Graduate School of Hard Knocks, declared in 1961 that, "the zillion dollar corporations are taking over in this country...
...World Communism could not ask for a better gift," he said, in referring to the impact of these revelations...
...The story of the price fixers in the electrical industry written by John G. Fuller puts things in better focus than the remarks of Hoffa...
...After all, the electrical industry executives were guilty of overt acts...
...Fuller does a good job of specifying the acts in this conspiracy: false names, clandestine meetings, Aesopian language for communication, collusive bidding, deliberate violation of the Sherman Anti-Trust Law...
...Grove Press, Inc...
...And what Senator is there who would suggest that perjury may have been involved in Cordiner's testimony...
...If so, the assumption is false because these companies are just as much subject to competitive market conditions as any other...
...One industrialist, Henry Ford II, a member of the board of directors of GE, urged a moral reform of business...
...Suppose these subversive elements operating in the electrical industry had been indicted under the Smith Act...
...Westinghouse, 38 per cent...
...But he did not begin a fight to eliminate either Cordiner or the president of GE who were responsible for the company's operations in these years...
...Ford, after all, has had its days in court too...
...And that is disgraceful...
...In fact, this succinct summary of the scandal in the electrical industry proves that Hoffa was wrong...
...Statement by Roger Blough, chairman of the Board of United States Steel corporation...
...After all, the Attorney General of the United States, Robert Kennedy, had said that "I regard the price fixing of the electrical industry as a major threat to democracy...
...In between is one of those rare revelations of the underworld of business as it operates in real life...
...Should anyone worry...
...The amount of money involved was much larger then Hoffa said: rigging prices on $7 billions of sales...
...Never settle for being just a vice president, or manager...
...It ends with a vote of confidence to Ralph Cordiner, chairman of the Board of General Electric, at a stockholders annual meeting in 1961...
...This story begins with a newspaperman's investigation on why bids on electrical equipment to TVA were identical, and had been for seven years...
...The eight largest tin can and tinware manufacturers monopolized 88 per cent of that business...
...Any bright eagerbeaver in the school of business administration can learn it quickly...
...The eight largest tire manufacturers controlled 91 per cent of the business...
...At least temporarily...
...The Judge was not vindictive: seven lesser executives were fined and did spend less than 30 days in jail, but this was surely a kindly act...
...And it was a real conspiracy...
...Or by remembering that in the steel industry the theory of price is this: "Price is competitive when we are able to give the customer a choice between two sources of supply at the same price...
...Allis Chalmers, 11 per cent...
Vol. 9 • July 1962 • No. 3
