The Great Short Circuit

From Washington last week came a sharp demonstration that the fuses of the great electrical price-fixing conspiracy (TIME, Feb. 29, 1960 et seq.) are still blowing. After six months of negotiations with the Justice Department, the General Electric Co. agreed to pay an immense $7,470,000 for an out-of-court settlement of eleven suits brought against it by Government agencies that claimed to have been overcharged on G.E. equipment as a result of the conspiracy. All but $1,000,000 of the payment--the biggest antitrust settlement in history--will go to the Tennessee Valley Authority, which first blew the whistle on G.E. and 28 other electrical companies when it became suspicious of identical bids on heavy equipment in 1959.

G.E. Chairman Ralph J. Cordiner described the settlement as "reasonable and fair"--a sentiment that was conspicuously not echoed by Westinghouse and the other electrical companies, which have still to settle with the Government. Cordiner hopes that the formula devised by the Government to determine how much it was overcharged can be used to settle out of court some 1,600 other suits that have been brought against G.E. by private and municipal power companies. Such settlements, said the G.E. president, would "ensure equity to all parties involved and avoid years of costly litigation." Even so, the cost to G.E. promised to be enormous--$45 million to $50 million over the next few years, by Cordiner's estimate.

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