Gob and Suction

Great is the delight of that diligent ichthyologist. Dr. William Beebe, when his deep-sea dredgings bring to light a perfect specimen of a rare fish. Diligent Senator Joseph C. O'Mahoney, chairman of the Temporary National Economic (Monopoly) Committee, last week had a similar sensation. Out of the depths of industry he brought wriggling to the surface as tight a little group of patent holders as his monopoly investigation could desire.

There are but two modern ways of mass-producing glass containers, the "suction" and the "gob" processes. Patents to machinery for the former are held by Owens-Illinois Glass Co., for the latter by the Hartford-Empire Co. Last year 67.4% of all glass containers in the U. S. were made under Hartford-Empire licenses, 29.2% under Owens-Illinois, leaving but 3.4% for independents. Owens-Illinois is a manufacturer, largest of its kind in the world, but Hartford-Empire makes nothing, merely licenses its patents or rents machinery. In 1924, 1932 and 1935 it formed cross-licensing agreements with Owens-Illinois, extending its influence over both processes.

Hartford-Empire was therefore the piece de resistance of last week's monopoly quiz and on the spot was its little known President Francis Goodwin Smith, whose mustache and bald head are in the best Peter Arno tradition. A soft-spoken New Englander of 57, President Smith is a self-made man who became general manager of Hartford-Empire's predecessor, Hartford-Fairmont Co., in 1915. He owns only a small block of stock in Hartford-Empire; most of it belongs to the Houghton family (Corning Glass Co.) and Beech-Nut Packing Co. Beech-Nut created the company in 1912 while looking for a good glass jar machine.

Though Mr. Smith's firm received a 67.77% return on its $2,500,000 net capital employed in 1937 operations, and though Mr. Smith admitted that it was virtually impossible for anyone to make glass bottles by the gob process without "coming to Hartford," he got in a retort, too. Chairman O'Mahoney observed, "that is a sort of AAA in milk bottles," and Witness Smith cracked back: "Not so far from it, but used intelligently."

When a Department of Justice assistant produced a memorandum by a former Hartford-Empire lawyer saying one of its "main purposes" was getting patents "on possible improvement of competing machines so as to 'fence in those and prevent their reaching an improved stage," Mr. Smith simply said that was not company policy.

President William E. Levis of Owens-Illinois took the position that he was interested in making bottles and wished the whole patent muddle could be avoided. "A patent," said he, "is not a grant of right to use the thing, it is only a grant to exclude other people from using the same thing." Pressed by Senator William E. Borah to admit that Hartford-Empire in effect fixed milk bottle prices, Mr. Levis only admitted that certain companies, including his own, "led" prices.

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