In Equity, No. —.

In the District Court of the United States
for theSouthern District of New, York.

The United States of America, petitionee,

- v.-

Coen Products Refining Company and others.

PETITION IN EQUITY.

GEORGE W. WICKERSHAM,

HENRY A. WISE,

United States Attorney,

Southern District of New York#

Attorney General.

JAMES A. FOWLER,

Assistant to the Attorney General.

JESSE C. ADKINS,

Assistant Attorney General.

WILLIAM H. MILLER,

Special Assistant to the Attorney General.

WASHINGTON I GOVERNMENT PRINTING OFFICE * 1913mai

C & I d

In the District Court of the United States
for the Southern District of New York.

The United States op America, "
petitioner,
v.

Corn Products Repining Company, f
a body corporate, and others, defend-
ants.

To the honorable Judges of the District Court of the
United States for the Southern District of New York,
sitting in equity:

The United States of America, by Henry A. Wise,
its attorney for the southern district of New York,
acting under the direction of the Attorney General
of the United States, brings this suit against the
above-named defendants.

The petitioner avers:

I.

DESCRIPTION OF THE DEFENDANTS.

The defendants to this bill and their citizenships
si and residences are as follows:

t Corn Products Refining Company, a body cor-
C porate under the laws of New Jersey, with its prin-
g* cipal place of business at No. 17 Battery Place,
^ New York, N. Y.; National Starch Company, a body
* corporate under the laws of New Jersey, with its prin-

79590—13-12

cipal place of business at No. 17 Battery Place,
New York, N. Y.; St. Louis Syrup and Preserving
Company, a body corporate under the laws of
Missouri, with its principal place of business at St.
Louis, Mo.; Novelty Candy Company, a body corpo-
rate under the laws of New Jersey, with its principal
place of business at 346 Clairmont Avenue, Jersey
City, N. J.; Penick & Ford (Limited), a body corpo-
rate under the laws of Louisiana, with its principal
place of business at New Orleans, La., and the follow-
ing-named individuals, all citizens of the United
States, as officers and directors of said corporation
defendants, to wit: (a) As officers and directors of the
Corn Products Refining Company, Edward T. Bed-
ford, as president, and director; William J. Matheson,
as first vice president and director; Frederick T. Bed-
ford, as treasurer and director; Frederick T. Fisher, as
secretary and director; A. B. Boardman, as director;
C. H. Kelsey, as director; George S. Mahana, as direc-
tor; George M. Moffett, as director; William H.
Nichols, junior, as director; A. A. Smith, as director;
James Speyer, as director; E. Beverly Walden, as di-
rector; and C. M. Warner, as director, all of New York,
N. Y., and Thomas P. Kingsford, of Oswego, N. Y., as
director. (6) As officers and directors of the National
Starch Company, E. Beverly Walden, as president
and director; R. S. Bruns, as vice president and di-
rector; Frederick T. Fisher, as secretary, treasurer,
and director; Frederick T. Bedford, as director,
and George M. Moffett, as director; all of New York,3

N. Y. (c) As officers and directors of the St. Louis
Syrup and Preserving Company, C. H. Lorenz, as
president and director; and Louis Suss, as secretary
and treasurer and director, both of St. Louis, Mo.;
and A. A. Smith, of New York, N. Y., as director.
(d) As officers and directors of the Novelty Candy
Company, F. A. Lohmeyer, of Jersey City, N. J.,
as president and director; Benjamin Schneewind,
of Chicago, 111., as vice president and director;
C. W. Lohmeyer, of Jersey City, N. J., as treas-
urer and director; Edward T. Bedford, 2nd, of Jer-
sey City, N. J., as secretary and director; and A. M.
Watkins, of New York, as director; and (e) William S.
Penick, junior, and James P. Ford, both of New
Orleans, La., as president and director and vice presi-
dent and director, respectively, of Penick & Ford
(Limited), of Louisiana. The full names of those
defendants whose initials are given in whole or in
part are unknown to petitioner.

II.

GROUNDS OF JURISDICTION.

The defendants are engaged in the manufacture
and sale of starch, glucose (also called corn syrup),
grape sugar, and various other articles partly com-
posed of corn products and have factories for such
manufacture and sale in the States of New Jersey,
New York, Illinois, and Iowa, and are engaged in
interstate and foreign trade and commerce in such
corn products and other commodities.4

The defendants are also engaged in the manu-
facture and sale of candy, composed largely of glu-
cose, and in the mixing of glucose with refiners’
syrup or molasses or other syrups, and the sale
thereof, and for such purposes have factories in the
States of Louisiana, Tennessee, Illinois, Iowa, and
New Jersey, and said defendants are engaged in
interstate and foreign commerce in such candy and
mixed syrups.

As will be hereinafter more in detail set forth, the
defendants have monopolized and attempted to
monopolize, and have combined and conspired among
themselves to monopolize such interstate and for-
eign commerce and trade in such corn products and
mixed syrups and have made and entered into con-
tracts, combinations, and conspiracies in restraint
of such interstate and foreign trade and commerce
therein, all in violation of sections 1 and 2 of the
act of Congress, approved July 2, 1890, and entitled
“An act to protect trade and commerce against un-
lawful restraints and monopolies,” and the object of
this petition is to restrain and prevent the con-
tinuance of such monopoly, contracts, combinations,
and conspiracies.

III.'

PRODUCTS MANUFACTURED FROM CORN.

The principal products derived from corn are (1)
starch, both for food and laundry purposes; (2) glu-
cose or corn syrup; and (3) grape sugar or com sugar.
Starch is first manufactured from the corn, and glu-5

cose and grape sugar are made by treating the starch
with certain acids, the resulting solid product being
grape sugar and the resulting syrup being glucose.
Glucose is used largely in the manufacture of candy,
jellies, jams, preserves, and the like, as well as in the
mixing of syrups. Grape sugar or corn sugar is
used in the tanning, brewing, and wine trades.
Starch is used for laundry purposes, as well as in
various articles of food.

The principal by-products of corn resulting in the
corn products business are gluten feed, corn oil, corn-
oil cake and corn-oil 'meal, and these by-products
result whether the principal products manufactured
be starch, glucose, or grape sugar. Starch and glu-
cose are the most important products of corn, being
articles of general use for food, household and manu-
facturing purposes, and large quantities of them,
worth millions of dollars, are annually used and con-
sumed in the United States, almost all of which is of
domestic production.

IV.

HISTORY OF DEFENDANT CORPORATIONS.

Combination of 1897—The Glucose Sugar Refining

Company.

In 1897, aside from the plants of the National
Starch Manufacturing Company, hereinafter de-
scribed, the principal plants for the manufacture
of corn products were those of the Chicago Sugar
Refining Company, a body corporate under the laws
of Illinois, with a capital stock of $650,000; the6

American Glucose Company, a body corporate under
the laws of New Jersey, with a capital stock of
$15,000,000; the Peoria Grape Sugar Company, a
body corporate under the laws of Illinois, with a cap-
ital stock of $50,000; the Rockford Sugar Refining
Company (Limited), a body corporate under the laws
of Illinois, with a capital stock of $500,000; Fir-
menich Manufacturing Company, a body corporate
under the laws of Illinois, with a capital stock of
$200,000; and the Davenport Syrup Refining Com-
pany, a body corporate under the laws of Iowa, with
a capital stock of $250,000.

In August, 1897, there was organized under the
laws of the State of New Jersey the Glucose Sugar
Refining Company (the name of which was on De-
cember 12, 1906, duly changed to Corn Products
Manufacturing Company), with a capital stock of
$40,000,000, of which $14,000,000 was preferred and
$26,000,000 was common stock.

Shortly after its organization, and in or about 1897,
the Glucose Sugar Refining Company acquired the
plants and all other property of the said Chicago
Sugar Refining Company, American Glucose Com-
pany, Peoria Grape Sugar Company, Rockford Sugar
Refining Company, Limited, Firmenich Manufactur-
ing Company, and the Davenport Syrup Refining
Company, and also acquired all of the capital stock
of the said American Glucose Company; and the said
Glucose Sugar Refining Company issued in payment
therefor its stock of the par value of $36,646,600.7

The six last-mentioned corporations prior to the
said consolidation were engaged in the manufacture
of starch and glucose and in the sale thereof among
the several States and with foreign nations; and upon
said consolidation said Glucose Sugar Refining Com-
pany acquired, and for some time thereafter retained,
a practical monopoly of the commerce in glucose
among the States and with foreign nations.

Consolidation of 1903—Corn Products Company.

- In June, 1880, the Chas. Pope Glucose Co. was in-
corporated under the laws of the State of Illinois,
under the name Geneva Grape Sugar Company, with
a capital stock of $120,000.

In November, 1898, the Illinois Sugar Refining
Company was incorporated under the laws of the
State of Illinois, with an authorized capital stock of
$750,000.

In February, 1901, the New York Glucose Com-
pany was incorporated under the laws of the State of
New Jersey, with a capital stock of $2,500,000.

The three last-mentioned companies manufactured
starch and glucose and other com products, and dur-
ing the period between the organization of the Glu-
cose Sugar Refining Company and the organization
of the Corn Products Company in 1902 were engaged
in interstate commerce in starch and glucose and
other corn products in competition with the said
Glucose Sugar Refining Company.

The National Starch Company was organized under
the laws of New Jersey in April, 1900, with a capital8

stock of $100,000, which, on May 2, 1900, was in-
creased to $9,500,000, of which $4,500,000 was pre-
ferred and $5,000,000 was common stock. Shortly
after its organization the National Starch Company
acquired practically all of the capital stock of the
National Starch Manufacturing Company, a body
corporate under the laws of Kentucky; The United
States Glucose Company, a body corporate under the
laws of New Jersey; the United Starch Company, a
body corporate under the laws of New Jersey; the
United States Sugar Refinery, a bod)'' corporate under
the laws of Illinois; and T. Kingsford & Son, a body
corporate under the laws of New York.

The National Starch Manufacturing Company was
organized in 1890 and prior to its acquisition by the
National Starch Company had acquired some twenty
or more starch and glucose factories situated at vari-
ous points in the United States, belonging, among
others, to the following-named corporations, partner-
ships, or persons: The Glen Cove Manufacturing Com-
pany, a New York corporation, at Glen Cove, Long.
Island; The William F. Piel Company, an Indiana
corporation, at Indianapolis, Indiana; the C. Gilbert
Starch Company, an Iowa corporation, at Des Moines,
Iowa; The Ottumwa Starch Company, an Iowa cor-
poration, at Ottumwa, Iowa; the Firmenich Manu-
facturing Company, an Illinois corporation, at Peoria,
Illinois; plant of Richard Johnson, at Madison, In-
diana; plant of John Clements, at Madison, Indiana;
The Julius J. Wood Starch Company, an Ohio cor-
poration, at Columbus, Ohio; The George Fox Starch9

Company, an Ohio corporation, at Cincinnati, Ohio;
Muzzy’s Starch Company, an Indiana corporation, at
Elkhart, Indiana; the Yoorhees Starch and Refinery
Company, an Illinois corporation, at Danville, Illinois;
The Excelsior Starch Manufacturing Company, an
Indiana corporation, at Elkhart, Indiana; The Atlan-
tic Starch Company, an Iowa corporation, at Atlantic,
Iowa; The Topeka Starch Company, a Kansas cor-
poration, at Topeka, Kansas; plant of Wesp, Lautz
Brothers & Company, known as the Niagara Starch
Works, at Buffalo, New York; plant of Thompson,
White & Company, at Franklin, Indiana; plant of
S. Cutsinger & Company, at Edinburg, Indiana; plant
of the A. Erkenbrecher Company, at Cincinnati,
Ohio; The Sleeper Starch Company, an Iowa corpo-
ration, at Des Moines, Iowa; and the Indiana Starch
Company, an Indiana corporation, at Franklin,
Indiana.

Prior to the purchase of said plants by the National
Starch Manufacturing Company the said corpora-
tions and concerns owning said plants were all en-
gaged in the manufacture and sale of starch and
other corn products and were active competitors
each with the others.

Of the plants taken over by the National Starch
Manufacturing Company, but few were in operation
at the time of the organization of the National Starch
Company in 1900, many of them having been aban-
doned as manufacturing plants and held as real estate
only.

79590—13-210

Tlie United Starch Company owned the capital
stocks or plants of the Sioux City Starch Company, a
body corporate under the laws of Iowa, with a plant
at Sioux City, Iowa; the Oswego Starch Factory, a
body corporate under the laws of New York, with a
plant at Oswego, N. Y.; the Argo Manufacturing
Company, a body corporate under the laws of Ne-
braska, with a plant at Nebraska City, Nebraska;
and the plant of Gilbert S. Graves, at Buffalo, New
York.

The said National Starch Company, through its
said subsidiary companies, was engaged principally
in the manufacture of starches of all kinds, although
glucose and other corn products were also manu-
factured.

For the purpose of further monopolizing the inter-
state trade in glucose and also that in starch and
other corn products, and for the purpose of destroy-
ing the competition then existing among the several
corporations and concerns then engaged in the man-
ufacture and sale of those products, the Corn Prod-
ucts Company was organized under the laws of New
jersey on February 6, 1902, with a capital of $30,-
000,000 preferred stock and $50,000,000 common
stock. The Corn Products Company thereupon ac-
quired practically all of the stock of the Glucose
Sugar Refining Company and the National Starch
Company; all of the stock of the Illinois Sugar Refin-
ing Company and the Chas. Pope Glucose Co.; and
forty-nine per centum (49%) of the capital stock of
the New York Glucose Company. At the time they11

were so acquired by the Corn Products Company the
corporations mentioned had stocks issued as follows:
The Glucose Sugar Refining Company, $13,639,300
preferred and $24,027,300 common stock; National
Starch Company, $4,028,300 preferred and $2,595,900
common stock; Illinois Sugar Refining Company,
$750,000; Chas. Pope Glucose Co, $120,000; and New
York Glucose Company, $2,500,000. The capital
stock of the Corn Products Company was all issued,
with the exception of about $5,000,000 which was
reserved for the purpose of acquiring outstanding
shares of the stocks of the Glucose Sugar Refining
Company and the National Starch Company.

When thus organized the Corn Products Company
had acquired a practical monopoly in the commerce
in starch and glucose among the several States and
with foreign nations.

Combination of 1906—Corn Products Refining Com-
pany.

The Warner Sugar Refining Company was organ-
ized under the laws of Maine in 1903, with a capital
stock of $3,000,000, and operated a plant for the
manufacture of glucose at Waukegan, Illinois.

The St. Louis Syrup and Preserving Company was
incorporated under the laws of Missouri, under the
name St. Louis Syrup Refining Company, in Septem-
ber, 1887, with a then capital stock of $10,000, which
was increased from time to time until March 26, 1904,
when such capital stock was fixed at $1,200,000.
The name of this corporation was changed from St.12

Louis Syrup Refining Company to St. Louis Syrup
and Preserving Company on April 6, 1900, by cer-
tificate duly filed in the office of the secretary of
state of Missouri. In 1903 a glucose plant was
built at Granite City, Illinois, by the Granite City
Manufacturing Company, a body corporate under the
laws of Illinois, organized in May, 1903, with a capital
stock of $300,000, which plant was, when completed,
turned over to the St. Louis Syrup and Preserving
Company and operated by the latter company.

The Cereal Sugar Company was chartered by the
corporation court of the city of Alexandria, Virginia,
on April 24, 1901, with an authorized capital stock of
$500,000 and operated a plant for the manufacture of
cereal sugar at Waukegan, such plant being situated
on land owned by the Warner Sugar Refining
Company.

These three last-mentioned corporations were en-
gaged in interstate trade and commerce in glucose,
starch, as well as in the other commodities manu-
factured by them and were active competitors of
the Corn Products Company and its subsidiary cor-
porations and of each other.

On February 6, 1906, the Corn Products Refining
Company was organized under the laws of the State
of New Jersey with a capital stock of $80,000,000, of
which $30,000,000 is preferred and $50,000,000 com-
mon stock, practically all of which has been issued.
This company was organized to acquire, and, when
organized, did acquire the following amounts of stock
in the corporations named: Corn Products Company,13

$23,241,815 of the $27,380,740 of preferred stock
issued and $41,456,457 of the $45,215,505 of common
stock issued; New York Glucose Company, $1,275,000
of the $2,500,000 of stock issued, or fifty-one per
centum (51%), being all the stock in this company
which was not then owned by the Corn Products
Company; Warner Sugar Refining Company, all of
the $3,000,000 of stock issued; St. Louis Syrup and
Preserving Company, all of the $1,200,000 of stock
issued; Cereal Sugar Company, $35,000 of the $75,000 ^
of preferred stock issued and $285,000 of the $425,000
of common stock issued, thus putting an end to the
active competition theretofore existing among the
companies named and giving the Corn Products Re-
fining Company the entire control of all the inter-
state trade and commerce in glucose, starch, and
other corn products in the United States.

The owners of the stock of the Corn Products Com-
pany surrendered one-third of their holdings for the
purpose of acquiring the entire interest in the four
companies named not already owned by the Corn
Products Company, in effect surrendering three
shares of stock of the latter company and receiving
therefor two shares of the stock of the Corn Products
Refining Company.

By certificate duly filed in the office of the secretary
of state of the State of Missouri on March 2, 1906, the
name of the St. Louis Syrup and Preserving Company
was changed to St. Louis Glucose Company. On the
same day a certificate of incorporation was issued by
the office of said secretary of state of Missouri to14

another company bearing the name St. Louis Syrup
and Preserving Company. This latter company was
capitalized at $300,000, which has since been de-
creased to $50,000, and is now engaged in the manu-
facture and sale of jams, jellies, preserves, and the
like, such products being composed of more or less
glucose or other corn products. The stock of the
St. Louis Syrup and Preserving Company is owned
by the defendant, the Corn Products Refining Com-
pany.

The petitioner alleges that upon its organization
the Corn Products Refining Company again obtained
and for some time retained the absolute control of the
trade in glucose, starch, and other corn products in
the United States.

Petitioner alleges that, out of the many corpora-
tions taken over in said three combinations, but two,
the Corn Products Refining Company and the
National Starch Company are now going concerns.
I The other companies taken over in said combinations
I have either been dissolved or have ceased to do
business.

On June 29, 1908, the Corn Products Company
and the Corn Products Refining Company were
merged and consolidated into one corporation under
the name Corn Products Refining Company, and
on August 3, 1908, the Corn Products Manufacturing
Company (formerly the Glucose Sugar Refining
Company)- and the Corn Products Refining Company
were merged and consolidated into one corporation
bearing the latter name.15

V.

HISTORY OF DEFENDANTS’ INTEREST [IN THE SYRUF-
MIXING- BUSINESS.

Petitioner alleges that there is large interstate
business throughout the United States in table syrups,
which are usually made by mixing glucose with re-
finer’s syrup or molasses or other kindred products.

The defendant Corn Products Refining Company
is monopolizing and attempting to monopolize the
interstate trade in such mixed syrups, in violation of
said act of Congress, approved July 2nd, 1890.
Since 1906 said Corn Products Refining Company
has acquired the stock of several companies engaged
in the mixing of syrups and in interstate commerce
in the same.

In November, 1906, said Corn Products Refining
Company, by Edward T. Bedford, its president,
acquired fifty per centum (50%) of the capital stock
of Penick & Ford, Limited, of Louisiana, a corpora-
tion engaged in the molasses and syrup mixing busi-
ness at Shreveport and New Orleans, Louisiana. In
or about the year 1909, said Penick & Ford, Limited,
of Louisiana, purchased the stock of goods, assets,
and good will of C. E. Coe, and in or about 1911
purchased the stock of goods, assets, and good will
of the Maury-Cole Company, both concerns having
been engaged in the molasses and syrup-mixing busi-
ness at Memphis, Tennessee, and for the purpose of
taking over the business of such concerns organized
Penick & Ford, Limited, of Tennessee, all of the
stock of which it owns. Said Penick & Ford16

(Limited), of Louisiana, in 1907 acquired over fifty-
one per centum (51%) of the stock of the Interna-
tional Molasses Company, of New Orleans, Louisiana,
a corporation under the laws of Louisiana engaged
in the molasses business, and sixty per centum
(60%) of the stock of the Oelerich and Berry Com-
pany, a corporation under the laws of Illinois, which
was organized to take over the businesses of the
Oelerich and Laux Company and the Berry-Maybrun
Company, molasses and syrup mixers of Chicago,
Illinois.

In 1907 said Corn Products Refining Company
acquired practically all of the stock of the St. Louis
Syrup and Preserving Company, a corporation under
the laws of Missouri, which was engaged in the man-
ufacture and sale of mixed syrups, jellies, jams, and
preserves, and also all of the capital stock of the
Manierre-Yoe Syrup Company, of Chicago, Illinois,
a corporation under the laws of Illinois, which was
engaged in the manufacture and sale of the same
commodities, as well as rock candy and maple syrups.

The said corporations and concerns, the stock or
business of which has been acquired by said Corn
Products Refining Company, either directly, or
through Penick & Ford, Limited, of Louisiana, were,
prior to the dates of such acquisition, active com-
petitors of said Corn Products Refining Company
and of each other in the manufacture and sale of
mixed syrups in interstate commerce.

Said Corn Products Refining Company now owns
one-half of the common stock and all of the preferred17

stock of Penick & Ford, Limited, of Louisiana, and
has a practical control of the latter company and its
subsidiaries. Said Manierre-Yoe Syrup Company
has been dissolved and said St. Louis Syrup and
Preserving Company is now used as a selling office
for the St. Louis market.

VI.

PRESENT CONTROL BY DEFENDANTS OF TRADE IN
STARCH, GLUCOSE, AND MIXED SYRUPS.

Since the organization of the Corn Products Re-
fining Company in 1906, various independent com-
panies have been organized and are now engaged in
the manufacture of starch and glucose and the sale
thereof in commerce among the various States; that
the average amount of corn ground daily in the manu-
facture of starch and glucose is approximately
150,000 bushels; that of this amount said Corn Prod-
ucts Refining Company and said National Starch
Company grind more than 100,000 bushels or approxi-
mately sixty-six per centum of the entire production'.

The petitioner alleges that by means of this con-
trol of such a large proportion of the manufacture
and sale of corn products, said Corn Products Re-
fining Company still monopolizes and attempts to
monopolize the commerce among the States and with
foreign nations in starch, glucose, and other corn
products, and is able to and does make and establish
the prices at which glucose, starch, and other corn
products shall be sold.

Said Corn Products Refining Company now con-
trols approximately eighty per cent of the interstate18

trade in mixed syrups and has monopolized and still
monopolizes interstate trade therein.

VII.

THE UNLAWFUL AND UNFAIR ACTS OF THE DEFENDANTS.

That in monopolizing said trade and in entering
into said contracts, combinations, and conspiracies
in restraint of trade the defendants were guilty of
the following unlawful and unfair acts and practices,
among others:

(a) Consolidations.

The three consolidations and combinations of corn
products manufacturers described in paragraph four
hereof were each in violation of the act of Congress,
approved July 2, 1890. Each of such combinations
included practically all of the then manufacturers of
glucose and the second and third of such consolida-
tions included practically all the then manufacturers
of starch in the United States. The object and pur-
pose of each combination was to restrain competi-
tion among the several manufacturers in interstate
trade and commerce in starch, glucose, and other
corn products and to monopolize the interstate com-
merce therein.

The contracts, purchases, and consolidations de-
scribed in Paragraph V were for the purpose of
restraining competition in the interstate trade in
mixed syrups and of monopolizing such interstate
trade therein, and were in violation of said act of
July 2, 1890.19

(b) Dismantling and sale of factories.

The several contracts, consolidations, combina-
tions, and conspiracies hereinbefore mentioned placed
in the ownership of the Corn Products Refining Com-
pany and its predecessors and subsidiaries, a large
number, to wit, forty or more, of glucose and starch
factories. The Corn Products Refining Company
now operates five of these plants, namely, those at
Waukegan, 111., Granite City, 111., Edgewater, N. J.,
Pekin, 111., and Davenport, Iowa. With the excep-
tion of the plant at Oswego, N. Y., which grinds, ap-
proximately, 3,000 bushels of corn daily, all of the
many plants of the National Starch Company have
been dismantled and sold.

All of the other plants taken over by the Corn
Products Refining Company and its predecessors and •
subsidiaries have been dismantled and many have
been sold, and in many instances the machinery in
such plants was sold separately. In most instances
when such plants have been sold the deeds of convey-
ance have contained covenants that the land so con-
veyed shall never, or, in some cases, shall not within
a certain long term of years, be used for the manu-
facture of starch, glucose, grape sugar, or kindred
products produced in a glucose or starch factory.
Such sales of dismantled plants were made for sums
which were but a small percentage of their original
cost, being in many instances as low as ten per centum
of such original cost. The prices paid by the Corn
Products Refining Company, its predecessors, and20

subsidiaries, for the plants acquired by them were
far in excess of the real values of such plants.

(c) Contracts not to reenter business.

Petitioner avers that, in the combination of 1897,
the Glucose Sugar Refining Company, later named
the Corn Products Manufacturing Company, took
contracts from the officers of the six companies taken
over not to engage in the business of manufacturing
glucose or other corn products for a period of twenty-
five years after the date of such contracts; that in
the second combination, in 1902, similar contracts
were taken from the officers and directors of the com-
panies then taken over; and, in the third combination,
in 1906, the Com Products Refining Company se-
cured contracts from the officers and directors of the
Warner Sugar Refining Company and the St. Louis
Syrup and Preserving Company not to engage for a
period of ten years from and after February 23, 1906,
directly or indirectly, in the business of manufacturing
glucose, starch, grape sugar, or other by-products of
corn in the United States within a radius of fifteen
hundred miles of Chicago. Contracts of similar effect
were taken from the officers and owners of the syrup
mixing companies and concerns acquired by said Corn
Products Refining Company either directly or
through Penick & Ford, Limited, of Louisiana, since
1906.

(d) Rebating of profit-sharing plan.

In November, 1906, just prior to the time that the
first independent glucose factory placed its products
on the market, the defendant, the Corn Products21

Refining Company, and the Glucose Sugar Refining
Company (later called Corn Products Manufac-
turing Company) submitted to the trade what was
designated as a profit-sharing plan or proposition,
and announced that they would set aside out of the
profits from the sale of glucose and grape sugar for
the last six months of the year 1906 and pay to their
customers an amount equal to ten cents per hundred
pounds on all sales of glucose and grape sugar made to
such customers during such period, the payment of
the profits to be made on December 31, 1907, on con-
dition that for the remainder of the year 1906 and
throughout the entire year 1907 such customers should
purchase exclusively from the Corn Products Refining
Company or the Glucose Sugar Refining Company or
their successors, all the glucose and grape sugar
required for use in their establishments. The rebat-
ing or profit-sharing plan was continued until the
year 1910.

(e) Guarantee against decline in prices.

The Corn Products Refining Company inaugurated
another sales plan whereby prices of its various com-
modities were guaranteed against decline in price to
the date of shipment : in other words, orders were
booked up at the prices prevailing on the date of such
booking, but if, however, on the date the goods were
shipped to the customer a lower price then prevailed,
the customer was given the benefit of such lower price;
but if there was an advance in price on the date of
shipment, the goods were sold at the original price.22

It became necessary for the independent manufac-
turers to sell their commodities under the same guar-
antee. The Corn Products Refining Company by
reason of its monopoly of trade in corn products
fixed the market prices thereof. This sales plan was
continued by the Corn Products Refining Company
up to October 1, 1912.

(f) Agreements with the American Maize-Products
Company and Stein, Hirsh and Company.

The American Maize-Products Company was or-
ganized under the laws of Maine in August, 1906,
under the name Western Glucose Company. The
Western Glucose Company was organized for the
purpose of manufacturing glucose and other corn
products, and erected a plant for that purpose at
Roby, Ind. In February, 1908, the Royal Bak-
ing Powder Company, a body corporate under the
laws of New Jersey, acquired control of the stock of
said Western Glucose Company, and on March 26,
1908, the name of the company was changed to
American Maize-Products Company. The said Royal
Baking Powder Company was, at that time and now
is, a large consumer of starch. It was the intention
of the organizers of the American Maize-Products
Company to engage in the manufacture and sale cf
glucose, starch, and other corn products, and also to
mix table syrups.

Thereupon the Corn Products Refining Company
threatened to engage in the making of baking powder
and did procure certain baking-powder machinery,
which machinery was subsequently sold to the Royal23

Baking Powder Company. Finally an agreement
was reached whereby the American Maize-Products
Company should and did sell its surplus products to
the Corn Products Refining Company.

Petitioner alleges that Stein, Hirsh and Company,
a copartnership, composed of Morris M. Hirsh and
William D. Stein, of Chicago, 111., and Frank G.
Hall and Leo Stein, of New York, N. Y., are and for
some time past have been engaged in the business of
packing and selling starch, dextrines, and the like,
and acting as brokers in the sale of corn products, with
headquarters in New York and Chicago. This firm
was employed in 1908 and 1909 by the Corn Prod-
ucts Refining Company to sell in competition with the
independent manufacturers, the glucose so purchased
by the Corn Products Refining Company from said
American Maize-Products Company. Pursuant to
such employment, during the year 1908, Stein, Hirsh
and Company announced that they had just com-
pleted their new glucose factory, and that they were
prepared to offer the products thereof at low prices,
holding themselves out as independent manufac-
turers seeking a market for their goods. The glu-
cose so offered for sale by said Stein, Hirsh and Com-
pany was in fact the product sold by said American
Maize-Products Company. The said Stein, Hirsh and
Company were directed by the Corn Products Re-
fining Company to confine their sales to customers
of the independent manufacturers and were forbidden
to sell to customers of the Corn Products Refining
Company.24

Said Stein, Hirsh and Company offered such glucose
at prices as low as twenty cents per hundred pounds
under the prices of the Corn Products Refining Com-
pany at the direction of said Corn Products Refining
Company. In order to conceal the fact that said
glucose was manufactured at the plant of the Ameri-
can Maize-Products Company all shipments thereof
were made under fictitious names to deceive the con-
sumers thereof as well as the independent manu-
facturers. These transactions among the said Corn
Products Refining Company, American Maize-Products
Company, and Stein, Hirsh and Company occurred
during the years 1908 and 1909 and were carried out
with the intention of suppressing competition.

(g) Threats to engage in the candy business.

In 1906 the Clinton Sugar Refining Company was
organized under the laws of the State of Iowa by per-
sons interested in the National Candy Company, a
body corporate under the laws of the State of New
Jersey, primarily to supply glucose to said National
Candy Company, which, prior to the spring of 1907,.
when said plant at Clinton, Iowa, began operations,
had been compelled to purchase its glucose from the
Corn Products Refining Company or its subsidiaries.
The output of the plant of the Clinton Sugar Refin-
ing Company was greater than the needs of the Na-
tional Candy Company and the surplus was offered
for sale to candy manufacturers and other glucose
consumers throughout the country in competition,
with the Corn Products Refining Company.25

Thereupon the defendant, the Corn Products Re-
fining Company, through its officers informed the
various candy manufacturers throughout the country
that it expected them to purchase a certain very
large percentage of the glucose needed by them from
the Corn Products Refining Company; that if said
company did not get a sufficient percentage of such
glucose business, it would go into the candy manu-
facture itself in competition with such manufacturers.
That pursuant to said threat during the year 1910, the
defendant, the Corn Products Refining Company,
acquired control of the stock of the Novelty Candy
and Chocolate Company, a body corporate organized
under the laws of the State of New Jersey in Decem-
ber, 1909. The capital stock of said candy company
was increased from $300,000 to $500,000 on October
21, 1910, and, on December 4, 1910, by certificate
duly filed in the office of the Secretary of State of
New Jersey, the name of the company was changed
to Novelty Candy Company. This company now
owns a factory in each of the four named cities:
Chicago, 111., Jersey Citjq N. J., Pittsburg, Pa., and
Memphis, Tenn. The products of these four facto-
ries are candies of a cheap grade, being composed
largely of glucose.

Petitioner alleges that the defendant, the Corn
Products Refining Company, acquired control of said
Novelty Candy Company in order to use such com-
pany for purposes of retaliation against the National
Candy Company for erecting the glucose plant of the
Clinton Sugar Refining Company, and also against
those manufacturing confectioners purchasing starch26

and glucose from independent manufacturers, and
to this end the products of said Novelty Candy
Company have been sold at unreasonably low prices.

(h) Unreasonable prices.

That said Corn Products Refining Company con-
trols approximately sixty-six per cent (66%) of
the interstate and foreign trade and commerce in
starch, glucose, and other corn products, and the
prices of such commodities have been kept by said
company at unreasonably low figures, which, in
many cases, were at cost of manufacture or less; that
these low prices were especially quoted on what are
known as mill starches, although the prices on
laundry and table starches, glucose, or other com-
modities have also at times been unreasonably low
with the purpose and intent of harassing and dis-
couraging independent manufacturers of these com-
modities.

That by reason of the foregoing and other unlawful
and unreasonable practices of said Corn Products
Refining Company and its subsidiary companies, in-
dependent manufacturers of starch, glucose, and mixed
syrups have been and are compelled to sell their
products at unreasonably low prices.

Petitioner alleges that there have been and are
throughout the United States corporations and other
concerns and persons engaged in the syrup-mixing
business. Many of such concerns or persons do not
manufacture glucose, but buy such glucose and mo-
lasses or kindred cane products on the market, mix
the same in their own factories, pack such mixed27

syrups under their own private brands, and engage
in interstate trade in such commodities. Many of
such syrup mixers necessarily purchased the glucose
required by them from the defendant, the Corn
Products Refining Company, and said company, with
intent to suppress and destroy such independent
syrup mixing, has on some occasions sold its own
brands of mixed syrups, particularly its “Karo,” at
such prices that the differential between the cost of
glucose to said syrup mixers and the selling price of
mixed syrup has been such that the business was
often carried on at less than cost of manufacture to
said syrup mixers.

Petitioner further alleges that heretofore wholesale
and jobbing grocers have ordered mixed syrups from
said Corn Products Refining Company, having such sy-
rups packed at the plants of said company under the
private brands of such grocers or jobbers, and that
said Corn Products Refining Company has practically
suppressed the private brands of said jobbers by
quoting to them prices on its own brands, particu-
larly its “Karo,” considerably less than the prices
quoted on the syrups packed under the private brands
of such jobbers. To further increase the sales of its
said brands of mixed syrups and to hamper the inde-
pendent syrup mixers, said Corn Products Refining
Company has, on occasions and in markets where
independent competition was aggressive, given bo-
nuses of from one to two cases of its mixed syrups
with every order for five cases of such syrups ordered
by jobbers and retailers.28

(i) Fixing resale prices.

The said Com Products Refining Company fixes
the prices at which jobbers and wholesale grocers
and retailers may sell its products, including its
syrups and starches sold in packages.

(j) Excessive share of freight rates.

The Corn Products Refining Company at its four
main plants at Pekin, Granite City, Argo, and Daven-
port, owns switching railroads connecting its plants
with the trunk lines; prior to March 1, 1910, through
rates were made by such switching lines and the
trunk lines, and the share of the through rates given
to the switching lines was in excess of the value of
the service performed by them, and such division
amounted in fact to a rebate from the railroad com-
panies of a part of the freight rates. This practice
was continued by the Corn Products Refining Com-
pany until prohibited by the Interstate Commerce
Commission.

Wherefore petitioner prays:

1.	That the contracts, conspiracies, consolidations,
and combinations hereinbefore described, in and of
themselves, as well as each and all of the elements
composing them, whether corporate or individual, be
decreed to be in restraint of interstate trade and an
attempt to monopolize and a monopolization thereof
within the first and second sections of the act of Con-
gress of July 2, 1890, entitled “An act to protect
trade and commerce against unlawful restraints and
monopolies.”

2.	That the defendants named herein be decreed to
have formed and entered into such contracts, combi-29

nations, and conspiracies to restrain trade and com-
merce in the production and sale of starch, glucose,
and other corn products and of mixed syrups among
the several States and foreign nations. That said
defendants and all persons acting or assuming to
act under their authority be perpetually restrained,
enjoined, and prohibited from further suppressing,
restraining, or destroying or from attempting to sup-
press, restrain, or destroy the trade and commerce of
any person, firm, or corporation engaged in the man-
ufacture and the sale and shipment, or the sale and
shipment, in interstate or foreign commerce, of starch,
glucose, and other corn products, and mixed syrups.

3.	That the court adjudge the Corn Products Re-
fining Company to be a combination in restraint of
interstate trade and commerce in the manufacture,
sale, and shipment of starch, glucose, and other corn
products and mixed syrups, a restraint and an at-
tempt to monopolize and a monopolization thereof;
that the court direct a dissolution of said combination.

4.	And your petitioner also prays for such other
and further relief as the nature of the case may re-
quire and the court may deem just and proper in the
premises.

To the end, therefore, that the United States may
obtain the relief to which it is justly entitled in the
premises, may it please your honor to grant writs of
subpoena directed to each and every one of said de-
fendants Corn Products Refining Company, Na-
tional Starch Company, St. Louis Syrup and Preserv-
ing Company, Novelty Candy Company, Penick &
Ford, Limited, Edward T. Bedford, William J. Mathe-
son, Frederick T. Bedford, Frederick T. Fisher, C. H.30

Kelsey, A. B. Boardman, George S. Mahana, George
M. Moffett, William H. Nichols, junior, A. A. Smith,
James Speyer, E. Beverly Walden, C. M. Warner,
Thomas P. Kingsford, R. S. Bruns, F. A. Lohmeyer,
Benjamin Schneewind, ,C. W. Lohmeyer, Edward
T. Bedford, 2nd, A. M. Watkins, C. H. Lorenz,
Louis Suss, William S. Penick, junior, and James
P. Ford, commanding them, and each of them,
to appear herein and answer, but not under oath (the
answer under oath being hereby expressly waived)
the allegations contained in the foregoing petition,
and to abide by and perform such order or decree as
the court may make in the premises.

Henry A. Wise,

United States Attorney
for the Southern District of New York. ■
George W. Wickersham,

Attorney General.

James A. Fowler,

Assistant to the Attorney General.

Jesse C. Adkins,

Assistant Attorney General.

William H. Miller,

Special Assistant to the Attorney General.

O