Case Dismissed

Into a hushed and crowded Chicago courtroom one morning last week strode white-haired Federal Judge Walter J. La Buy. For almost a year, he had been studying the 2,500 exhibits and 2,500,000 words of testimony and argument in the biggest antitrust case in history: the Government's suit to force the Du Pont company to sell its holdings in General Motors and the members of the Du Pont family to sell their stock in U.S. Rubber (TIME, July 11, 1949)

Reading from his 220-page opinion, Judge La Buy lost no time in bringing the long-drawn-out proceedings to an end. Ruled he: "The Government has failed to prove conspiracy, monopolization, a restraint of trade, or any reasonable probability of a restraint, and for those reasons the . . . complaint should be dismissed."

Dropped Names. Filed five years ago, the suit originally involved 186 defendants, including Du Pont Chairman Walter S. Carpenter and President Crawford H. Greenewalt. Since then, 154 of the defendants had been dropped, many of them because they were minors. Of the three top Du Ponts named, only 77-year-old Irenee survived; Lammot died at 71 before the suit went to trial, and Pierre, 84, died last spring. The suit was costly both in money (an estimated $5,000,000 for the defense, including $750,000 in hotel bills alone) and in men: the defense required a battery of 33 lawyers; the Government's key attorney was forced to drop out of the case with a nervous breakdown while he was preparing the case for trial.

The core of the Government's massive case was that the Du Ponts had bought stock in General Motors and U.S. Rubber to assure markets for their own products. The Du Ponts defense: they had bought the stock purely as an investment. To protect their original G.M. investment they were forced to pour millions more into the company in the early '205, and run it, after G.M. Founder William C. Durant's enormous stock-market losses threatened to ruin him and G.M. alike. At the time, the Du Pont total investment was some $80 million; its holdings are now worth $1.8 billion.

In his decision, Judge La Buy, veteran antitrust jurist who once slapped a $1.3 million bill for damages on G.M., cut some new paths through the tangle of antitrust enforcement. Where other courts have ruled that the mere existence of a potential monopoly can be cause for conviction under the Clayton Act, La Buy said: Such a possibility existed for 30 years in the relationship between Du Pont and G.M. But "the record discloses that no restraint of trade has resulted. Accord ingly . . . there is not. . . any reasonable probability of such a restraint within the meaning of the Clayton Act."

Demolition Job. One by one, La Buy ran down the list of Government charges and carefully demolished each in turn. The U.S. charged that through Du Pont's ownership of 23% of General Motors stock, the company pressured G.M. to buy Du Pont products. Wrote La Buy: "No agreement was made . . . which bound [G.M.] to buy any portion of its requirements from Du Pont . . . [Du Pont] did not limit General Motors' purchasing freedom."

The Government charged that Du Pont dictated the selection of G.M. directors and dictated their policies. Wrote La Buy: "The record shows consultation and conference, but not domination. Since the 1920s Du Pont has not had, and does not today have, practical or working control of General Motors."

Turning to similar Government charges concerning U.S. Rubber and the Du Ponts' ownership of 18% of its common stock, Judge La Buy was equally explicit: "There is no evidence that . . . the Du Pont family in the aggregate ever had voting control of U.S. Rubber. The Government, moreover, has failed to show that the U.S. Rubber stock . . . was acquired with the intent to create a protected market for Du Pont." What about General Motors' consistently heavy purchases of U.S. Rubber products? Said La Buy: "General Motors . . . has continued to buy a substantial portion of its tires and tubes from U.S. Rubber for its own good business reasons--and for no other reason."

Fact & Rumor. La Buy put no more credence in the Government's charge that the Du Ponts formed the Delaware Realty & Investment Corp., a holding company, and Christiana Securities Co., which controls the Du Pont company, to perpetuate control over Du Pont.

In Wall Street on the morning of the decision, rumor had it that the judge would rule in favor of the Government. Du Pont opened at 161, off a point. But when the decision was announced, traders drove the stock up 8 points to a new high for the year (it closed at 166 1/2). Part of the confidence resulted from the feeling that Judge La Buy's decision would be hard to appeal. Instead of ruling on arguments of law, it denied the Government charges on points of fact. And if the Government appealed the decision, it would hardly be in hopes of winning, but only so that it could not be charged with going easy on big business.

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