Defeat for United Shoe

As a rising young corporation lawyer, Louis Dembitz Brandeis helped in 1903 to put together Boston's United Shoe Machinery Corp. A combine of the three biggest companies in the business, United held more than 300 basic patents, and about 60 per cent of its line was made by no one else. By leasing and refusing to sell its machines, it was able to dominate the shoe-machine market; some 85% of all machines used in U.S. shoe factories were leased from United. Brandeis, later Supreme Court Justice, came to regret some of the company's practices. But the Justice Department made comparatively little progress in three suits to prove United a monopoly which had squeezed almost everyone else out of business.

Last week, in their fourth attempt, the trustbusters had better luck. This time, after a trial that had lasted five years, Boston's Federal Judge Charles E. Wyzanski ruled that United had restrained trade by refusing to sell its machines. After poring over 14,194 pages of testimony and examining 5,512 exhibits, he ruled that United must: 1) offer its machinery for sale on reasonable terms, 2) license competitors to use its patents, and 3) sell its $4,500,000 supply business (nails, tacks, eyelets, grommets). But he refused to make United split up into three competing companies and stop leasing its machinery, as the Justice Department had asked. Too many of the U.S.'s 1,300-odd shoe manufacturers cannot afford to buy the machines, he said, and might be forced out of business if they could not lease them.

This file is automatically generated by a robot program, so reader's discretion is required.