Lock & Key

After poking its head into the board rooms of thousands of corporations in the U.S., the Federal Trade Commission last week reported that it didn't like what it had seen. Said FTC: "Interlocking relationships among the directors of the 1,000 largest U.S. manufacturing corporations constitute a threat to competition." What was even more alarming, FTC Chairman James M. Mead told a House Judiciary subcommittee, was that there were ways to interlock that Congress had not covered when it passed the Clayton Anti-Trust Act. The law, he said, "can be so easily evaded as to be scarcely worth enforcing."

FTC found that companies could get around the law by having officers or stockholders who were not directors in their own company act as directors or officers of other companies. In the Big Four electrical machinery companies (R.C.A., G.E., Westinghouse and Western Electric), FTC found almost every brand of interlocking directorates.

At first glance at the oil industry, FTC found no links between Standard Oil (N.J.) and Socony-Vacuum, two of the biggest U.S. companies, or between them and other big oil companies. But on closer inspection FTC said it found that Standard and Socony were linked, through common affiliates, to each other and to almost every other major oil company. ^ To break up interlocking directorates, Chairman Mead wants Congress to amend the Clayton Act, giving the FTC power to act in cases and situations not now covered by the law.

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