Guilty as Charged

Imperial Chemical Industries, Ltd. occupies the same position in the British chemical market as Du Pont does in the U.S. But while Du Pont advocates free competition, Lord McGowan, who headed I.C.I, for years, made no bones about his liking for cartels. "Unrestricted competition," he once said, brings "eventual chaos." But in 1944, the Justice Department decided that Lord McGowan and Du Pont had gone too far in restricting competition. It filed an antitrust action against the two (plus Du Pont's subsidiary, Remington Arms), charging that they had conspired to restrain trade by splitting up markets for a list of goods ranging from Cellophane and rayon to insecticides and synthetic rubber.

At war's end, both Du Pont and I.C.I. abandoned most of the agreements which had caused the Justice Department to file suit. Du Pont, for example, opened foreign branches to compete in I.C.I.'s markets; for his part, 77-year-old Lord McGowan got I.C.I, into Du Font's U.S. market by buying a Rhode Island chemical company (TIME, March 13, 1950) before he retired. Nevertheless, the case went to trial.

In Manhattan last week, Federal Judge Sylvester J. Ryan handed down his decision: the defendants were guilty. Flushed with victory, the Justice Department planned to ask that Du Pont" and I.C.I. be ordered to put an end to some of their remaining links (e.g., joint ownership of five companies in South America and Canada). As a further relief, Justice wanted Du Pont to give other manufacturers royalty-free use of its patents on nylon, neoprene, etc.

But finding competition for Du Pont in these products might be hard. It took more than a year for Du Pont to find anyone who was willing to spend $20 million to go into Cellophane. Now, with the prices of nylon products dropping and the cost of building new chemical plants scooting higher, it hardly seemed likely that many would want to take the plunge.

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