Enter the House Detectives

Conrad Hilton did not know it, but almost since the day he began courting the Statler company's nine hotels, the house detectives have been snooping into the affair. Last week they broke right into the bridal chamber, crying that the Hilton-Statler marriage (TIME, Aug. 16) was illegal. Attorney General Brownell and his antitrust assistant, Stanley Barnes, filed a civil antitrust suit charging that the merger 1) eliminated competition, particularly for convention business, between Hilton and Statler; 2) may give Hilton a competitive advantage over other hotels; 3) "substantially increased" concentration in the hotel industry. Brownell and Barnes asked that Hilton Hotel Corp. be required to sell Statler hotels in four cities, (New York, Washington, St. Louis. Los Angeles) where the two chains had formerly competed, along with any "such other acquired properties . . . as the court deems necessary."

The suit came as a surprise to almost everyone in the hotel business--and especially to Conrad Hilton. The day it was filed he was in Paris, on his way back from Berlin, where he had inspected the site for a proposed new hotel. When he first announced the Statler merger, said Hilton, he got a letter from the Justice Department asking for information, which he gave. Then came another "very polite" letter asking for more information, which was supplied. Finally, a third letter arrived saying that that was all the information they wanted. Said Hilton last week: "We never heard any more from them until they announced this suit."

Hilton had a strong answer to the Government's case. For one thing, said he, "we don't think we're in interstate business." For another: "In the U.S. there are 30,000 hotels with 1,500,000 guest rooms, which make an annual gross in excess of $2 billion. We operate 23 hotels in the U.S. [with] 24,680 rooms, and in 1954 their gross was $119 million. That is not a monopoly. We will vigorously defend the action of our corporation in acquiring the Statler company." Added Hilton: "Most of our future expansion will be outside the U.S."

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