The Knife

Like a nation preparing for war, the mighty Du Pont empire had been carefully preparing its defenses and enlisting allies for a momentous struggle to keep its empire intact. Only two weeks ago, it split its high-priced stock ($179), thus bringing its price down to $45 so that smaller investors could buy it, and, in effect, become Du Pont's allies. Last week, the expected assault began. Attorney General Tom Clark filed an antitrust suit in Chicago's Federal Court to break the $1,585,000,000 Du Pont holdings into at least four pieces. It was the biggest of the long list of antitrust suits the Government has filed against the company since 1907, when Hercules Powder Co. and Atlas Powder Co. were carved out of Du Pont.

The suit was also one of the most sweeping ever filed by the Antitrust Division. It named as defendants the three famed Du Pont brothers, Pierre, Lammot and Irenee, and more than 100 others who were related to them "by blood or marriage" (which might include the children of Franklin D. Roosevelt Jr. and his exwife, Ethel du Pont).

Despite its size, the Du Pont chain of command which Tom Clark wanted to dismember was simple. The Du Pont family controls the Christiana Securities Co. (TIME, Feb. 21), a holding company in which anyone can buy stock (current bid price: $3,050 a share). Christiana Securities Co., plus other holdings of the Du Pont family, control E.I. du Pont de Nemours & Co. In turn, Du Pont controls General Motors Corp. through its 10 million shares of G.M. stock. Du Pont and G.M. together own Kinetic Chemicals, Inc., a maker of refrigerants; G.M. and Standard Oil Co. (N.J.) own Ethyl Corp. (Jersey Standard is not named in the suit). Members of the Du Pont family, as individuals, own 17% of the stock of U.S. Rubber and are alleged to control it.

Stock Sale. Tom Clark wanted to eliminate any personal or stock connection between these companies by forcing Du Pont to sell its stock in G.M. and Kinetic Chemicals, forcing G.M. to sell its interests in both Kinetic Chemicals and Ethyl Corp. and the Du Ponts to sell their stock in U.S. Rubber.

Just how this could be done was a problem which the complaint did not discuss. Its only suggestion was that G.M. purchase its own stock from Du Pont.

To back up his demand for dissolution of the Du Pont empire, Tom Clark charged that the Du Pont company had enforced:

P: A three-way purchasing agreement between G.M., U.S. Rubber and itself, thus freezing out competing suppliers, e.g., G.M. had at one time agreed to buy at least 50% of its rubber products from U.S. Rubber. This, it is charged, was later revised upward, with different G.M. divisions agreeing to take different percentages of U.S. Rubber products.

P: A three-way selling system of "secret rebates and preferential prices" that hurt outsiders buying similar products from the defendants at higher prices.

P: Exclusive exchange of patents and data between the three companies.

Trumpeted Clark: the accused companies were the "largest single concentration of industrial power" in the U.S.

Stock Charges? To Du Pont's President Crawford H. Greenewalt, a son-in-law of Irenee du Pont, the charge of "bigness," and that alone, seemed to be the nub of the complaint. Snapped he: "Since these relationships [between Du Pont and the other companies] have been a matter of public information for many years, the motive for this suit must arise out of a determination ... to attack bigness in business as such." The New York Herald Tribune agreed. It gave the back of its hand to Tom Clark for "Pecksniffian" charges, and said: "Mere size is the Government's primary target [though] the Government itself has fostered bigness in American industry."

The Government itself had, in fact, been trying to get Du Pont to expand. The Atomic Energy Commission has been vainly begging Du Pont, which ran the Hanford atomic plant during the war and then got out lest it be tagged as a merchant of death again, to put its vast resources back to work on atomic energy. But as long as Tom Clark thought Du Pont was too big, there was small hope that Du Pont would accede to AEC's plea to grow bigger.

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