Full opinion text
STEEL, District Judge. The Government has brought a civil action against Penn-Olin Chemical Company (Penn-Olin), Olin Mathieson Chemical Corporation (Olin), and Pennsalt Chemicals Corporation (Pennsalt), in which it seeks to prevent and restrain them from allegedly continuing to violate Section 1 of the Sherman Act, 15 U.S.C. § 1, and Section 7 of the Clayton Act, 15 U.S.C. § 18. The primary attack of the Government is directed against a joint venture between Pennsalt and Olin, pursuant to which they jointly organized and have controlled Penn-Olin for the purpose of having it construct a plant at Calvert City, Kentucky to produce and sell sodium chlorate. The Government charges that the effect of the joint venture and of the action of the parties thereunder may be to substantially lessen competition and tend to create a monopoly not only in sodium chlorate, but also in other non-chlorate chemicals, in violation of Section 1 of the Sherman Act and Section 7 of the Clayton Act. By an amendment to its complaint the Government has also charged that agreements between Pennsalt and Olin entered into in December 1957 and February 1958, denominated, respectively, the “sales agreement” and the “production agreement”, restrain trade and commerce in sodium chlorate in violation of Section 1 of the Sherman Act. JURISDICTION The Court has jurisdiction over the person of each defendant, and by virtue of Section 15 of the Clayton Act, 15 U.S.C. § 25, and Section 4 of the Sherman Act, 15 U.S.C. § 4, it has jurisdiction over the subject matter of the action. THE DEFENDANTS Pennsalt is a Pennsylvania corporation with its principal place of business in Philadelphia, Pennsylvania. It is a chemical company engaged in the production and sale of about 400 chemicals and chemical products, at fifteen plants located in eleven states as follows: Alabama California Georgia Illinois Kentucky (2 plants) Michigan Ohio Oregon Pennsylvania (2 plants) Texas (3 plants) Washington Pennsalt’s nationwide sales operations are conducted from its headquarters in Philadelphia and from 18 regional offices located in 13 states as follows: Alabama California (3 offices) Georgia Illinois (2 offices) Michigan Missouri New York Ohio (2 offices) Oregon Pennsylvania Texas (2 offices) Washington Wisconsin Pennsalt has been engaged in the chemical business for over 110 years. In 1960 its sales amounted to over $90,000,-000 on which it earned almost $5,000,000. During the same year, its assets were approximately $90,000,000. , Since 1958 it has been engaged in a $55,000,000 capital investment program for the modernization and expansion of existing facilities and the construction of new ones. Olin is a corporation organized under the laws of Virginia with its principal place of business in New York City. It is a diversified industrial corporation. The Chemical Division is one of seven operating divisions, and accounts for approximately 30% of the corporation’s operating revenues. Olin’s Chemicals Division produces a great number and variety of chemicals and chemical products from plants located in 15 states as follows: Alabama Arizona Arkansas Georgia Illinois Kentucky Louisiana Maryland Mississippi Nebraska New York North Carolina Pennsylvania Texas Virginia Olin was formed in 1954 by the merger of Olin Industries, Inc., and Mathieson Chemical Corporation. Olin’s activity in the chemical business reaches back, through its predecessor, Mathieson Chemical Corporation, to 1892. In 1960 Olin had sales of $690,000,000 on which it earned a net profit of $35,000,000. Its assets during that year amounted to $860,000,000. During 1960 its capital expenditures were almost $49,000,000. Net sales of its chemical division in 1960 amounted to $217,000,000. Penn-Olin is a Delaware corporation which was organized on February 25, 1960 by Olin and Pennsalt pursuant to a joint venture agreement between them dated February 11, 1960. Pennsalt and Olin each own one-half of Penn-Olin’s capital stock. The officers of Penn-Olin are divided equally between officers of Pennsalt and officers of Olin. The board of directors of Penn-Olin is comprised equally of representatives of Pennsalt and those of Olin. Penn-Olin has no officers, directors or employees who are not concurrently employed by either Pennsalt or Olin. Penn-Olin constructed a plant at Calvert City, Kentucky at a cost of $6,454,000, for the production of 26,500 tons of sodium chlorate per year. It commenced production on September 1, 1961. By agreements executed in October 1961, dated as of January 2, 1961, Pennsalt undertook to operate the Penn-Olin plant and Olin agreed to sell its output. All of the defendants are engaged in interstate commerce. THE ASSERTED ILLEGALITY OF THE JOINT VENTURE The Government claims that each of the defendants was engaged in interstate commerce at the time when Penn-salt and Olin acquired the stock of Penn-Olin, that the acquisition of such stock was tantamount to an indirect acquisition by Pennsalt and Olin of the assets of the other at a time when each was subject to the jurisdiction of the Federal Trade Commission, and that the joint venture and the actions taken thereunder may result in a substantial lessening of competition in one or more sections of the country, or tend to create a monopoly, in sodium chlorate and other non-chlorate chemicals. For these reasons it is charged that Section 7 of the Clayton Act has been violated. The Government also charges that regardless of whether the joint venture involved an acquisition of stock or assets banned by Section 7 of the Clayton Act, it nevertheless constituted a combination in restraint of trade in violation of Section 1 of the Sherman Act. The defendants deny the anticompetitive or monopolistic effect of the joint venture and assert that competition in the manufacture and sale of sodium chlorate has been increased by Penn-Olin entering the field. Defendants also contend that Section 7 of the Clayton Act is without application because, defendants say, Penn-Olin was not engaged in commerce when its stock was acquired by Olin and Pennsalt, and neither Olin nor Pennsalt acquired any- interest in the assets of the other when they acquired Penn-Olin stock. The last defense will not be discussed since, for the reasons hereafter stated, the joint venture did not have the anti-competitive effect at which Section 7 was aimed. The Sherman Act challenge will also be disregarded, for the anticompetitive standard imposed by Section 7 of the Clayton Act is less stringent than that of the Sherman Act. Brown Shoe Co. v. United States, 370 U.S. 294, 329, 82 S.Ct. 1502, 8 L.Ed.2d 510 (1962). Broadly speaking, the Section 7 issues to be resolved are whether the effect of the joint venture: 1. May be to substantially lessen competition or tend to create a monopoly; 2. In any section of the country; 3. In any line of commerce. These question will be discussed in inverse order: The Relevant Lines of Commerce The parties agree that two “line[s] of commerce” within the meaning of Section 7 of the Clayton Act are relevant to this case: sodium chlorate, and of the non-chlorates, calcium hypochlorite. Sodium Chlorate Sodium chlorate is a white crystalline chemical. It is produced commercially by the electrolysis of an acidified solution of salt (sodium chloride). The process is closely akin to that used in the commercial production of chlorine and caustic soda. Sodium chlorate of like purity is a fungible commodity. Any which is produced for sale by a domestic producer is reasonably interchangeable with that of any other domestic producer. In 1960 over 91,000 tons of sodium chlorate, valued at close to $18,000,000, were produced in the United States. The domestic production of sodium chlorate has increased greatly within the last ten years. From 1950-1955, the domestic production of sodium chlorate more than doubled, rising from 22,085 tons in 1950 to 46,972 tons in 1955. From 1950-1960, the production of sodium chlorate more than quadrupled, rising from 22,085 tons in 1950 to 91,900 tons in 1960. In 1960, over 54,600 tons of sodium chlorate were produced east of the Rockies and 37,300 tons produced west. At the prevailing prices (9 cents per pound in the east and 10% cents per pound in the west), eastern production was valued at over $9.8 million while western production amounted to $7,8 million. The largest consumer of sodium chlorate is the pulp and paper industry. That industry uses sodium chlorate in the bleaching of pulp for brighter, higher quality paper. The pulp and paper manufacturers use sodium chlorate as a principal raw material to generate chlorine dioxide, a gaseous material which possesses the unique ability to bleach cellulose fibers to a maximum whiteness with little or no loss of fiber strength. In 1958 70,541 tons of sodium chlorate were used commercially in the United States. Of this, 29,000 tons, or 41.1%, were used in pulp and paper bleaching. The next largest amount, 16,100 tons, or' 22.8%, was used for herbicides (weed control). In 1960, the national shipments amounted to 81,928 tons of which 52,415, or 64%, were for pulp and paper mill consumption. Of the 47,036 tons shipped into the southeast in 1960, 39,563 tons, or 84%, were consumed by pulp and paper mills. The recent growth of the sodium chlorate market is largely due to the adoption and rapid expansion of chlorine dioxide bleaching in the pulp industry. In addition to its use by the pulp and paper industry, sodium chlorate is also used in agricultural chemicals (herbicides and defoliants) and in the production of ammonium perchlorate and other derivatives. Since 1953 and prior to Penn-Olin, three producing companies, or their predecessors, have constituted the sodium chlorate industry in the United States: Hooker Chemical Corporation (Hooker), American Potash & Chemical Corporation (AmPot), and Pennsalt. Imports of sodium chlorate, stipulated to have been not substantial, have been as follows: 1956 892 tons 1957 335 tons 1958 1,322 tons 1959 2,596 tons 1960 4,152 tons Hooker is the largest producer and seller of sodium chlorate in the United States. In 1956 Hooker acquired Old-bury Electro Chemical Company (Old-bury) which had produced sodium chlorate at Niagara Falls, New York since about 1900 and which, in 1954, had constructed a plant in Columbus, Mississippi to meet the growing demand for sodium chlorate in the southeast. At the time when Oldbury constructed its Columbus plant, it had no other facilities or activities at or near Columbus. The capacity of Hooker’s Columbus plant was increased in 1956, 1958 and 1960; the capacity of the Niagara Falls plant was decreased in 1961. The capacity of Hooker’s two plants has been as follows: Niagara Falls Columbus 1957 12,000 tons 17,435 tons 1958 12,000 tons 21,340 tons 1959 12,000 tons 29,150 tons 1960 18,000 tons 32,000 tons 1961 14,000 tons ■ 32,000 tons In 1960 Hooker had assets of $187,000,-000 and net sales of $150,000,000. AmPot is the second largest producer and seller of sodium chlorate in the United States. It entered the business in November 1955 by acquiring Western Electro Chemical Company (Western). The latter had a single plant at Henderson, Nevada, where it had produced sodium chlorate since 1941. In February 1957 AmPot authorized construction of a sodium chlorate plant at Aberdeen, Mississippi to meet the growing demand in the southeast, and to compete effectively in that market with Hooker’s Columbus, Mississippi plant. AmPot has twice expanded the capacity of the original Aberdeen plant. The capacity of the two AmPot plants has been as follows: Henderson Aberdeen 1957 27,000 tons 1958 27,000 tons 1959 27,000 tons 12,000 tons 1960 27,000 tons 15,000 tons 1961 28,000 tons 22,500 tons In 1959 the total assets of AmPot were $73,000,000 and its net sales in that year were $50,500,000. AmPot uses the Solvay Process Division of Allied Chemical and Dye Corporation (Allied Chemical) as its sales agent for sales of sodium chlorate to the pulp and paper and textile industries. Allied Chemical is a leading producer and seller of chemicals in the United States. Allied Chemical uses its large sales force and large technical service facilities and the Solvay process for generating chlorine dioxide in selling sodium chlorate produced by AmPot. In 1960 Allied Chemical had assets of $801,000,000 and sales and operating revenues of $766,000,000. When AmPot’s sodium chlorate plant at Aberdeen went on stream, Solvay was almost entirely responsible for selling the output of that plant. Today, the direct selling of the Aberdeen sodium chlorate output is largely AmPot’s responsibility. AmPot contributes approximately 70% of the direct selling effort. The percentages of sodium chlorate sales made by Hooker and AmPot in 1960 were as follows East of U. S. Rockies Southeast Hooker 45.9%' 54.6% 49.6% American Potash 35.6% 37.9% 41.7% Totals 81.5% 92.5% 91.3% Pennsalt has produced sodium chlorate at Portland, Oregon since 1941 which it had sold principally west of the Rockies. The following tabulation sets forth its initial productive capacity at Portland and its expansion of that plant to date: Tons Per Year October 1941 2,194 October 1942 3,448 January 1943 4,248 December 1949 5,448 February 1954 7,848 October 1957 12,392 October 1959 15,392 Until the early 1950’s, Pennsalt’s sales of sodium chlorate were principally for herbicidal use and virtually no sales were made to pulp and paper mills. At that time Solvay, which was selling sodium chlorate produced by AmPot, began offering its chlorine dioxide process to the pulp and paper industry conditioned upon the user purchasing its sodium chlorate requirements exclusively from Solvay. This led Pennsalt, in mid-1953, to enter into an agreement with Mathieson under which Pennsalt was permitted to install the Mathieson process in all the paper mills in the northwest. After this occurred, Solvay was never again successful in putting in its process in the northwest, and by 1960 Pennsalt had attained 100% of the sodium chlorate business of the western pulp and paper industry. In July 1961 a fourth company, Pittsburgh Plate Glass Company (PPG), announced that it would construct a 15,-000 ton per year sodium chlorate plant at Lake Charles, Louisiana. PPG is a large, diversified industrial corporation which produces and sells chemicals through its Chemical Division, formerly a subsidiary company, Columbia Southern. PPG has large technical service, sales, market research, and laboratory forces already serving the southeastern pulp and paper industry. In 1960 PPG had total assets of $625,000,-000 and net sales of $628,000,000. A fifth company, Pacific Engineering & Production Company of Nevada (Pacific), with the aid of a loan of $2,400,-000 from American Cyanamid Company, is constructing at Henderson, Nevada a sodium chlorate plant with a capacity of 5,000 tons per year to commence production late in 1962. For its loan American Cyanamid received a promissory note of Pacific secured by deed of trust on all of Pacific’s assets, an option to receive license on Pacific’s processes, and an option to acquire all the assets of Pacific or 50% of its common stock. American Cyanamid is a leading producer and seller of chemicals in the United States. Olin has never manufactured sodium chlorate for sale or been an independent seller of it. For years, however, it and its predecessor Mathieson has manufactured sodium chlorite which was sold to pulp and paper mills. The sodium chlorite, when dissolved in an acid solution by the mills, generated chlorine dioxide which the mills used as a bleaching agent for the pulp. The raw material used in the manufacture of sodium chlorite is sodium chlorate. In the early 1930’s Mathieson produced sodium chlorate chemically for its own use in manufacturing sodium chlorite. During the late 1930’s it stopped manufacturing sodium chlorate and turned to buying it. Approximately 5,000 tons of sodium chlorite are sold in the United States annually. Olin is the only domestic producer and 1960 was its best year. Calcium Hypochlorite Calcium hypochlorite, like sodium chlorate, is used in the production of pulp and paper. There are three important competitors in calcium hypochlorite: Olin, Pennsalt, and PPG. In 1959 Pennsalt and Olin together accounted for $6,480,000 sales, or 88.8% of all calcium hypochlorite sold in the United States. Their respective market shares were: Olin 62.4% Pennsalt 26.4% In 1960 Pennsalt and Olin accounted for 76.6% of the $6,900,000 sales of calcium hypochlorite throughout the United States. Ninety-nine percent of each company’s sales were made in 43 states where both sold the product. The competition between Olin and Pennsalt in the sale of calcium hypochlorite is substantial. The Relevant Market Section 7 of the Clayton Act is-aimed at a substantial lessening of competition in “any section of the country”,, or, as the statute is frequently paraphrased, in any relevant market. Whether a given transaction may substantially lessen competition depends upon its probable effect in a relevant market. Tampa Electric Co. v. Nashville Coal Co., 365 U.S. 320, 329, 81 S.Ct. 623, 5 L.Ed.2d 580 (1961). The delineation of a relevant market is therefore a necessary predicate for determining the anticompetitive effect of any transaction challenged under Section 7. Brown Shoe Co. v. United States, supra, 370 U.S. p. 335, 82 S.Ct. p. 1529. Calcium Hypochlorite In calcium hypochlorite the parties-agree.that the national market is the relevant one. Sodium Chlorate The parties likewise agree that there-is a relevant southeastern market in-sodium chlorate, and although they define this market somewhat differently,, the difference is not significant. But here agreement ends. The Government claims that there are two other (relevant markets: the national market and the eastern market. The national market, as the name implies, embraces the entire continental United States, except Alaska. The finding of a national market is important in the Government’s view because it is said to put Pennsalt, Olin and Penn-Olin in the same area, to establish that Pennsalt .and Olin should have been actual competitors, as a matter of law, at the time •of Penn-Olin’s creation, and to determine that Pennsalt and Penn-Olin were •actual competitors, as a matter of law, following Penn-Olin’s creation. Defendants deny that a national market exists. The eastern market is defined as the ■entire United States east of the Continental Divide. It excluded only the states lying west of the Rocky Mountains, viz, Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming. Defendants say that the statistical •analysis of the competitive effect of Penn-Olin is the same regardless of whether the eastern or southeastern market is deemed to be relevant, and ■that it is immaterial whether there is a relevant eastern market. This position, asserted both in defendants’ brief and at the argument, was not controverted by the Government. It has made no effort to show a difference, significant in antitrust law, between the competition effect of the challenged transactions in the so-called eastern as against the southeastern market. The Court does not therefore feel called upon to make an independent analysis of the problem. So the issue is the narrow one whether the southeast is the only relevant market, or whether there is a relevant nationwide market as well A market is relevant in determining whether a given transaction may substantially lessen competition only if it is an area of effective competition. Standard Oil Co. v. United States, 337 U.S. 293, 300, n. 5, 69 S.Ct. 1051, 93 L.Ed. 1371 (1949); United States v. Maryland and Virginia Milk Producers Ass’n, 167 F.Supp. 799, 802 (D.D.C.1958), aff’d 362 U.S. 458, 80 S.Ct. 847, 4 L.Ed.2d 880 (1960). The two terms — area of effective competition and relevant market — are synonymous. Tampa Electric Co. v. Nashville Coal Co., supra, 365 U.S. p. 328, 81 S.Ct. p. 628. Whether a geographic location is or is not an area of effective competition in a given case is a question of fact. Congress prescribed a pragmatic, factual approach to the definition of the relevant market and not a formal legalistic one. The geographic market in which the anti-competitive effect of a transaction is to be tested must both correspond to the commercial realities of the industry and be economically significant. Brown Shoe Co. v. United States, supra, 370 U.S. pp. 336-337, 82 S.Ct. pp. 1529-1530 (1962). It can be defined only in the light of the overall objectives of Section 7 and with particular recognition that it is being defined for the purpose of determining the reasonable probability of substantially lessening competition. United States v. Bethlehem Steel Corp., 168 F.Supp. 576, 588 (S.D.N.Y.1958). When Pennsalt and Olin entered into the joint venture, there were only three companies in the United States which produced sodium chlorate for sale commercially: Hooker, AmPot and Pennsalt. Pennsalt had only one plant. It was on the west coast at Portland, Oregon. Hooker had two plants, both in the east. One was at Niagara Falls, New York, and the other at Columbus, Mississippi. AmPot had two plants — one in the east at Aberdeen, Mississippi, and the other in the west at Henderson, Nevada. The Mississippi installations of AmPot and Hooker were both in the southeastern market. The southeastern market was the one in which there was the heaviest concentration of sodium chlorate buyers. Of the buyers, the pulp and paper mills were far and away the largest. Plants having almost half of the national sodium chlorate productive capacity were also located in the southeast. After the southeast, the largest concentration of buyers and the largest productive capacity were in the 11 states west of the Rocky Mountains. In 1960, therefore, the two most important markets in the United States, both from the standpoint of consumption and production, were first, the southeastern market, and second, the western market. Of foremost importance in determining whether there was a nationwide relevant market is the question whether western shippers could compete effectively in the southeast, and southeastern producers could compete effectively in the 11 western states. Unless they could, there was no relevant national market. Normally of vital importance to competitive effectiveness are quality, price and service. So far as appears, neither AmPot, Hooker or Pennsalt enjoyed any advantage over the other in the quality of its product. From the standpoint of both price and service, Pennsalt was at a decided disadvantage, as against AmPot and Hooker, in supplying buyers in the southeast. Pennsalt’s price disadvantage resulted from the cost of transportation which it had to bear. To be competitive in the southeast, Pennsalt was faced with the necessity of absorbing the difference between the freight from its Portland plant and the buyer, and the freight between the buyer and the closest southeastern supplier. The freight disadvantage toAmPot in shipping a ton of sodium-chlorate into the southeastern market from Henderson, Nevada as against shipping it from Aberdeen, Mississippi was approximately $25 to $30 a ton. This represented about 15% of the delivered price of $163 a ton. The freight disadvantage to Pennsalt was even greater. A competitive price disadvantage-arising from transportation costs is an-important factor in determining the-scope of a relevant market. United States v. Columbia Steel Co., 334 U.S. 495, 68 S.Ct. 1107, 92 L.Ed. 1533 (1948), reh. den. 334 U.S. 862, 68 S.Ct. 1525, 92 L.Ed. 1781 (1948); American Crystal Sugar Co. v. Cuban-American Sugar Co., 152 F.Supp. 387, 398 (S.D.N.Y.1957), aff’d 259 F.2d 524 (2d Cir. 1958); Erie Sand & Gravel Co. v. F. T. C., 291 F.2d 279, 281-282 (3d Cir. 1961). The record fails to suggest that Pennsalt was in a position to surmount or equalize its freight disadvantage because of lower operational costs, or otherwise. Remoteness from southeastern buyers-also placed Pennsalt at a service disadvantage. To pulp and paper manufacturers prompt delivery is a matter of importance. Delivery time for a shipment from Mississippi to the southeastern market is normally two to four days. Shipments from the northwest take ten to fourteen days. The chances of shipping delays increase as the distance between supplier and customer becomes-greater. When Olin was acting as selling agent for Pennsalt under the December 1957 contract, Olin encountered buyer resistance because Pennsalt’s production was located at a substantial distance from the market. In ad ítion, a uyer wan s an as sured source of supply. _ A remote seller such as Pennsalt who is called upon to absorb substantia ieig cos s canno be viewed as a stable source of supply. It will, m all likelihood, favor buyers in its own vicinity whenever the supply situation becomes tight. This would appear to be particularly true in the case •of Pennsalt since for many years both the bulk price and the drum price of sodium chlorate has been higher west of the Rockies than east of the Rockies. This price differential of about 15%, coupled with the freight equalization with which Pennsalt is burdened, would, in times of short supply, naturally cause Pennsalt to favor west coast purchasers at the expense of buyers in the southeast. The proximity of productive facilities in terms of the availability to a buyer of service and supply is also important in the delineation of a relevant market. Crown Zellerbach Corp. v. F. T. C., 296 F.2d 800, 817 (9th Cir. 1961), cert. den. 370 U.S. 937, 82 S.Ct. 1581, 8 L.Ed.2d 807 (1962). See also Tampa Electric Co. v. Nashville Coal Co., supra, 365 U.S. pp. 331-333, 81 S.Ct. pp. 630-631. The disadvantages inherent in the distance of Pennsalt’s plant from southeastern buyers prevented Pennsalt from effectively competing against suppliers with plants in that area. To Pennsalt, the southeast was not a “natural locus of distribution”. American Crystal Sugar Co. v. Cuban-American Sugar Co., supra, 152 F.Supp. p. 398. Pennsalt’s proximity to pulp and paper manufacturers in the northwest made that market the natural distributional area for it. In 1960 Penn-salt supplied 100% of the sodium chlorate bought by pulp and paper manufacturers in the northwest. The Government answers that Penn-salt’s competitive handicaps are theoretical only. It argues that despite Penn-salt’s natural, freight, or other burdens, it has hurdled all obstacles, and by its actual shipments across country has demonstrated itfl abil% to effectively cornpete -n ^ aoutheast- Theory; the Gov. ernment says, is of little consequence as against the facts. United States v. Bethlehem Steel Corp., supra, 168 F.Supp. pp. 592, 599. ... , . „ P°f " °Ut “ ^ f^nnsalt shipped across country of sodium chlorate or 32% ^ ^ shipments of 15,362 tons, The key factor which enabled Pennsalt to do this is said to have been the substantial excess of eastern demand over pro-auction. Despite the Government’s assertion of a substantial imbalance between supply and demand in the “eastern” market, none existed in the southeast. The total shipments of sodium chlorate to the southeast during 1960 was 47,035.76 tons, The total capacity of the southeastern plants was 47,000 tons; Hooker at Columbus, 32,000 tons; AmPot at Aberdeen, 15,000 tons. In 1960 the southeastern market was not a deficit area. in 1960 Pennsalt shipped into the southeastern market 4,186 tons, or 27% of its total shipments of 15,195 tons. Of these shipments, 3,203 tons were sold by Olin as agent for Pennsalt under their sales contract of December 1957. Olin had long-standing contacts with many buyers as a result of other chemicals sold to them and enjoyed a unique good will because of having made the Mathieson process available without charge. The arrangement between Pennsalt and Olin was only temporary, and Pennsalt was losing $80,000 a year on the sales which Olin was making. Pennsalt’s shipments of 3,203 tons in fulfillment of sales generated by Olin were of a special nonrecurring kind. They cannot be considered as indicative of Pennsalt’s effectiveness as an independent competitor in the southeast. Apart from the 3,203 tons sold by Olin, Pennsalt shipped only 983 tons of sodium chlorate into the southeastern market. The total shipments of sodium chlorate into the southeastern market in 1960 for all purposes was 47,035.76 tons. Of this, Hooker shipped 23,263.52 tons, or 49%, and AmPot shipped 19,586.24 tons, or 42%. Pennsalt’s shipments of 3,203 tons under the sales agreement with Olin were 7%. The shipments which Penn-salt made in satisfaction of its own sales were 2%. Furthermore, of the 983 tons shipped to the southeast by Pennsalt, independently of Olin, only 458.40 tons went to pulp and paper manufacturers. This was l'% of the total tonnage of 39,562.83 which was shipped to the southeastern pulp and paper manufacturers in 1960. It compares with 18,127.71 tons, or 46%, shipped by Hooker, 17,556.72 tons, or 44%, shipped by Ampot, and 3,420 tons, or 9%, sold by Olin for Pennsalt. In 1960 shipments of 7,472.93 tons of sodium chlorate were made to buyers, other than pulp and paper mills, in the southeast. The sales agreement which Pennsalt had with Olin left Pennsalt free to compete for this business. It succeeded in obtaining 525 tons, or about 7>%. Both in theory and in fact Pennsalt was not an effective competitor in the southeast. In furtherance of its national market claim, the Government points out that in-1960 Ampot shipped across country 8,808-tons of sodium chlorate from its Henderson, Nevada plant, or 64% of its total shipments of 13,767.82 tons from that plant. Of these “across country” shipments, 7,237 tons, or 52.6%, of the shipments from Henderson went into the southeast. But at the time Ampot’sAberdeen plant, with a productive capacity of 15,000 tons, was unable to take-care of the total tonnage of 19,586.24 tons which Ampot supplied to southeastern buyers. In contrast, Ampot’s Henderson capacity of 27,000 tons far exceeded the 9,586.55 tons demanded by Am-Pot’s customers in areas outside the southeast. This dual imbalance between supply and demand at Ampot’s two plants was intracorporate and temporary. It was rectified in December I960 whenAmPat increased its capacity at Aberdeen by 7,500 tons. It was AmPot’s intention to satisfy the requirements of its customers in the southeast out of this increased capacity at Aberdeen and not from Henderson. So that such shipments as AmPot made into the southeast from Henderson are not significant in determining whether a western shipper can effectively compete for business in the southeast. So far as shipments from the southeast to the west are concerned, in 1960 Ampot made no shipment from its Aberdeen plant to buyers west of the Rockies. Hooker’s situation with respect to-east-west shipments was different. Although in 1960 Hooker made no shipments to the west coast from its Niagara Falls plant, it shipped 2,708.35 tons from its Columbus plant to customers west of the Rockies. This was 14.9% ■of the 18,152.72 tons shipped into the area. It compares with 10,485 tons, or 57.8% shipped by Pennsalt from Portland and 4,959.37 tons, or 27.3% shipped "by AmPot from Henderson. The 2,708.-■35 tons which Hooker shipped to buyers in the west represented 7% of the 37,-■559.91 tons which Hooker shipped from both Niagara Falls and Columbus. At the time Hooker had excess productive capacity of magnitude. As against .a total of 50,000 tons (Niagara Falls 18,-■000 tons, Columbus 32,000 tons) it shipped to all markets east of the Rockies ■only 34,851.6 tons, or 70% of its available capacity. Tonnage shipped from the Columbus plant to all markets east of the Rockies amounted to 26,478.23 tons leaving that plant with 5,521.77 tons ■at Columbus, or 20.9% of the plant capacity, to be disposed of. It was out of this excess that the 2,708.35 tons were supplied to the west. Of this, 1,920.65, •or about %, went to a single buyer, U. S. Borax Co., for herbicida! use. The total shipments of AmPot and Hooker from their eastern facilities were ,52,964.88 tons; viz.: Hooker shipments 37,559.91 Columbus and Niagara Falls AmPot shipments 15,404.97 Aberdeen Total 52,964.88 'Of this, the 2,708 tons which Hooker shipped to the west coast from its excess capacity at its Columbus plant, amounted to 5%. The east-west shipments by Hooker in 1960 were undoubtedly the result of a desire to keep its plants operating as close to capacity as possible when eastern buyers were not available. Here, there is no indication that an imbalance between supply and demand, either nationally or locally, had been the industry norm over a period of years or that it will be in the future. This circumstance makes irrelevant United States v. Bethlehem Steel Company, supra, which held that in determining the relevance of a market, freight costs were only a marginal factor when an industry-wide imbalance between supply and demand had persisted through the years and reflected an industry pattern (168 F.Supp. pp. 598-599). In sum, neither Pennsalt nor AmPot could compete effectively from their western plants for business in the southeast where the highest concentration of buyers was located. Nor could AmPot or Hooker, the two companies having eastern facilities, effectively compete for business on the west coast. In each case the competitive limitation was due to market remoteness. There was no national market for sodium chlorate in 1960 relevant to an ascertainment of the competitive impact of the joint venture. The Effect of the Joint Venture on Competition in Sodium Chlorate On the competition issue, the initial position of the Government is novel and far reaching. It contends that Penn-salt and Olin could have competed with each other since each was as financially able and otherwise competent to compete on an individual basis as other sodium manufacturers which were doing so. In these circumstances, it is said that the antitrust laws required Pennsalt and Olin to compete individually or to stay out of business. Their attempt to cornpete jointly, through the medium of Penn-Olin, because of a desire for greater profitability and risk limitation, is therefore said to be violative of Section 7. The Government thus lays aside as immaterial any consideration of whether, but for Penn-Olin, Pennsalt and Olin would, have entered the market as individual competitors, or what the competitive effect of Penn-Olin may be in the light of relevant economic factors. Instead, it would substitute a conclusive presumption that any combination specified in Section 7 between companies having the overall capability to go into business alone has a pernicious effect on competition and lacks any redeeming virtue; it would make any such combination illegal per se. No precedent supports the Government’s position and its lack of logic condemns it. Compare United States v. E. I. DuPont de Nemours & Co., 118 F.Supp. 41, 219-220 (D.Del.1953), aff’d 351 U.S. 377, 76 S.Ct. 994, 100 L.Ed. 1264 (1956) which held that under the Sherman Act it is not illegal per se for actual competitors to combine by means of a joint venture, but that a determination of the unreasonableness of the restraint is essential to its illegality. The real issue is whether, based upon relevant economic factors, the formation of Penn-Olin has resulted, or as a reasonable probability will result, in a substantial lessening of competition or tend to create a monopoly in sodium chlorate in the southeastern part of the United States. Prior to the joint venture, Olin had never produced sodium chlorate for sale in any market area or during any period of time. Nor had it ever sold sodium chlorate except for the limited time when it acted as sales agent for Pennsalt under the December 1957 contract. It had never purchased for its own use sodium chlorate from Pennsalt. On the other hand, Pennsalt had been manufacturing and selling sodium chlorate since 1941 from its plant at Portland, Oregon. Its shipments into the southeastern market were competitively not substantial. The creation of Penn-Olin did not represent a combination of companies which were competing in the manufacture and sale of sodium chlorate in the southeastern market or elsewhere. Nor did it represent a combination of companies standing in the relationship of supplier and customer in the southeastern market or elsewhere. It was neither a vertical combination or a horizontal combination. Contrasted with these anticompetitive relationships which are frequently the subject of antitrust condemnation, the arrangement between Olin and Penn-salt was sui generis. When Section 7 was amended in 1950 Congress was apprehensive of the rising tide of economic concentration as a dynamic force which it believed posed serious threats to the free enterprise system. One of the basic purposes of the 1950 amendment was to arrest in their incipiency combinations resulting in the concentration of power which would probably have the effect of jeopardizing to a substantial extent competition. Brown Shoe Co. v. United States, supra, 370 U.S. pp. 315, 317, 82 S.Ct. pp. 1518, 1519. The creation of Penn-Olin was not the typical case of one competitor menacing an industry by increasing its competitive power through the acquisition of another competitor. Penn-Olin was not the instrumentality through which two competitors sought to enlarge their economic power. Pennsalt and Olin were not competitors. Pennsalt was a company which had experience in the manufacture and sale of sodium chlorate in the far west. Olin was a company which had contacts of value with prospective customers in the southeast. Penn-Olin was the means by which the strength of the two companies was joined — not for the purpose of further pre-empting a market which they already occupied, but to break into a market to challenge the supremacy of two companies which were dominating it. Those companies were Hooker and AmPot. In 1960 Hooker supplied 49.5% and Ampot furnished 41.6% of the requirements of buyers in the southeast. Pennsalt’s share, independent of the quantity sold by Olin as its sales agent, was 2.1%, and including Olin’s sales, was 8.9%. As for productive capacity, Pennsalt nationally was the smallest of the three companies. In 1960, Hooker had 50,000 tons, or 46.5%, AmPot 42,000 tons, or 39.1%, and Pennsalt 15,434 tons, or 14.4%. In the southeastern market, Hooker’s plant at Columbus, Mississippi had a capacity of 32,000 tons, or 68%, of the total capacity in that market, and AmPot’s 15,000 ton plant at Aberdeen possessed the remaining 32%. Pennsalt had no plant in the southeast. When Penn-Olin goes on stream it can reasonably be expected to have an immediate effect on competitive conditions which theretofore existed. Thereafter, it is not to be supposed that Pennsalt will continue to make shipments to the southeast. What it otherwise might have supplied from Portland will be shipped by Penn-Olin from Calvert City. As an independent competitor in the southeast, Pennsalt will probably be finished. But the elimination of Pennsalt does not mean that competition will be substantially lessened within the intendment of Congress. Whether a combination described in Section 7 will have the anti-competitive effect forbidden by the Act, cannot be ascertained merely by looking at its effect upon the competitive activities of the combining companies. The critical determination is whether the combination substantially lessens competition generally in an economically significant market. Brown Shoe Co. v. United States, supra, 370 U.S. p. 335, 82 S.Ct. p. 1529. Pennsalt occupied only a relatively insignificant competitive position in the southeast. As will be later shown, the competitive benefits which derive from Penn-Olin entering the market far exceed any competitive loss resulting from Pennsalt’s probable elimination. The Government asserts that another immediate effect of the joint venture will be to make Olin a captive buyer of sodium chlorate from Penn-Olin and to deprive other suppliers of obtaining any of Olin’s business. For some years Olin has been buying sodium chlorate at its Niagara Falls plant to use in the manufacture of sodium chlorite. Its requirements have been supplied by Hooker from its Niagara Falls plant. While Olin’s 50% ownership of Penn-Olin does not legally deprive Olin of the right to continue to buy from Hooker or anyone else, self-interest might lead Olin to buy from Penn-Olin. But it cannot be said that as a matter of reasonable probability Olin will do so. Whether purchasing from Penn-Olin will be to Olin’s net advantage depends upon a balancing of the advantage which will accrue to Olin as a stockholder of Penn-Olin as against freight and service disadvantages inherent in shipments from Calvert City instead of a “next door” supplier. The record gives no indication how Olin will evaluate these conflicting considerations. In any event, however disadvantaged other suppliers may be in seeking Olin’s business, it will not diminish competition for business in the southeast. The primary attack of the Government is not directed to the alleged adverse affect of the joint venture on existing competition, but against its effect upon various aspects of potential competition. The Government argues that the financial resources of defendants, as compared with those of Hooker and AmPot, are so great as to give Penn-Olin competitive advantages that will ultimately lead to market domination by it. This contention is based largely upon the proposition that the defendants, because of their ■size, will be able to use their combined buying power as a basis for making reciprocal arrangements with vendors who are sodium chlorate buyers, which will give Penn-Olin an undue sales advantage over its competitors. Pennsalt is an acknowledged practitioner of reciprocity and uses purchasing-marketing coordination to further its sales efforts. Whether this is also the policy of Olin is more questionable. The record does not disclose whether Hooker and AmPot have or will endeavor to capitalize on their buying power to further their sales position. But in any event, whatever advantage Penn-Olin might be able to obtain through reciprocal arrangements because of the combined size of the defendants scarcely warrants the conclusion that as a matter of reasonable probability Penn-Olin will ultimately dominate the sodium chlorate market. AmPot and Hooker are both multimillion dollar companies with established positions in the southeastern market. Neither is apt to be at a competitive disadvantage simply because of defendants’ size. Thus far, neither has shown any disposition to lessen its competitive efforts because of confrontation by Penn-Olin. On the contrary, both have attempted to make themselves more formidable as business rivals. Prior to Penn-Olin, the capacity of the Hooker plant at Columbus was 29,150 tons. Since Penn-Olin, the capacity has been increased to 32,000 tons. After Penn-Olin’s plan to build a plant at Calvert City became known, Hooker employed a new salesman who was a specialist in pulp and paper sales, and installed a pulp and paper research laboratory for its customers. It offered its customers five-year contracts guaranteeing them a firm price during the contract period. It also proposed to increase its selling efforts generally. These actions were due in part at least to the increased competition expected from Penn-Olin. Similarly with AmPot. After AmPot learned of the joint venture it proceeded to expand the capacity of its Aberdeen plant from 12,000 to 22,500 tons, and began to offer five-year contracts to its customers guaranteeing them a fixed price for five years. The determination in 1961 of PPG to enter the southeastern market makes the likelihood of market domination by Penn-Olin even more remote. PPG plans to construct a sodium chlorate plant at Lake Charles, Louisiana with an intended ultimate capacity of 15,000 tons. It is a company which in 1960 had assets of $625,000,000 and sales of $628,000,000. From the standpoint of size it is capable of competing effectively with Penn-Olin or anyone else. The Government’s forecast that Penn-Olin will uproot Hooker and AmPot from their entrenched positions and ultimately become the dominant factor in the southeast Í3 based on conjecture and nothing more. The Government further asserts that the size of the Calvert City plant will probably deter other companies from entering the southeastern market, when otherwise they might have done so. The Government points out that Penn-Olin’s 26,500 ton plant was the largest ever built at one time in the United States, and that previously almost all plants at the outset went in the 2,000-15,000 range. By the time Penn-Olin was ready to build, the demand for sodium chlorate in the southeast had increased dramatically. The size of its plant was not out of line with competitors’ plants then in existence or imminently in prospect. The in terrorein significance which the Government attributes to the disparity between the size of Penn-Olin’s plant and those initially constructed by others under conditions which then prevailed, is not warranted. Such evidence as there is should allay any fear that Penn-Olin, either because of the size of its plant or the combined resources of the defendants, will have any exclusionary effect upon potential entrants having antitrust relevance. When PPG announced its decision to build at Lake Charles, Louisiana, it knew of Penn-Olin’s intention to build at Calvert City. Prospective competition from Penn-Olin did not cause PPG to alter its plans. It is true that PPG made its decision after the present suit was begun. It cannot be supposed, however, that PPG’s decision was made upon the basis of so hazardous a judgment that Penn-Olin would be eliminated or rendered substantially less effective competitively by a judgment in the Government’s favor. It is more reasonable to conclude that PPG acted because an appraisal of market conditions convinced it that regardless of the outcome of the present litigation, additional sodium chlorate capacity was needed in the southeast and that after its plant was built, it would be able to obtain a fair share of the market for itself. The Government points out that “rumor” indicated that the idea of building in the southeast occurred to the Solvay Division of Allied Chemical Corporation, Wyandotte Chemicals, and Virginia Smelting Company, but that none had done so. Penn-Olin is said to be the reason. This rumor was never substantiated. Each of the rumored potential competitors was interviewed by agents of the F.B.I. at the direction and under the supervision of counsel for the Government. Yet the Government called no witness from any of the companies. Its failure to do so at least suggests that it could find no one to corroborate its claim. It is true that prior to the joint venture Pennsalt was of the opinion that the southeastern market could handle only one more significant producer; and both Pennsalt and Olin believed that by a prompt announcement on February 15, 1960 of the formation of Penn-Olin and its plans, the market might be preempted from other potential competitors. But this evidence will not support the conclusion that one or more other companies were probably deterred by Penn-Olin from going into business in the southeast, since there is no proof that any newcomer other than PPG was considering doing so and PPG decided to enter the market after Penn-Olin had been announced. The absence of entry by others, in itself, is not too meaningful, since even before the formation of Penn-Olin was announced there had been no newcomers in the sodium chlorate industry for a decade. Furthermore, whether the unidentified companies which the Government asserts were probably excluded from the market would have been as effective business rivals as Penn-Olin is to be doubted. The combined experience of Pennsalt and Olin in sodium chlorate far exceeded that of any other potential market entrant. AmPot and Hooker had a virtual monopoly in the southeast and a formidable opponent was required if substantial inroads upon their entrenched positions were to be made. It cannot be held that as of the date of trial Penn-OIin probably deterred others from entering the field. What Penn-Olin’s effect in the future may be upon would-be entrants can only be a matter ■of conjecture. Obviously, the number .and strength of companies already in a market will have a bearing upon another's decision to enter it. But it is only ■one of a myriad of other factors which will control the decision. The imponderables are too great to hazard a forecast as to Penn-Olin’s future deterrent effect, •even on the basis of probabilities, which will have validity. The Government makes the further argument that if Olin and Pennsalt had not •determined to become partners via PennOIin, the probabilities are that both would have built a sodium chlorate plant somewhere in the southeast. Penn-OIin, the argument runs, thus prevented Pennsalt, an “actual” competitor, and Olin, a “potential” competitor, from independently competing in the southeast. The interest which Pennsalt had in building a sodium chlorate plant in the southeast was of long standing. Its 20-year operating experience at Portland had provided it with all requisite manufacturing know-how, and it was aware •of the rapidly expanding market in the southeast. As early as 1951 it had cost .studies made for a plant at Calvert City, Kentucky. From 1955 on the company gave almost continuous consideration to the establishment of a plant in the southeast. The record contains frequent expressions of optimism by Pennsalt personnel concerning the desirability of .southeastern expansion. Yet no decision to proceed was ever arrived at. This was ■due primarily to the inability of the management to satisfy itself that the plant would be sufficiently profitable to meet the rate of return standard which it had established as a condition for new investments. Olin’s interest in manufacturing and selling sodium chlorate in the southeast for its own account likewise antedated the joint venture by a number of years. It realized that sodium chlorate would soon replace sodium chlorite as a raw material in the Mathieson process, and that the demand for sodium chlorate by pulp and paper mills in the southeast was rapidly expanding. It had extended experience in the technical aspects of bleaching pulp and paper. It possessed valuable contacts with the pulp and paper mills as a result of selling other chemicals to them, and having made available, without charge, the Mathieson process. This combination of circumstances led Olin to actively consider the possibility of building a plant of its own in the southeast. To that end, it had studies made of plant location, power availability, sales potential, manufacturing techniques, construction costs, profitability, and other relevant factors. But Olin, like Pennsalt, never decided to go forward independently with the project. The primary difficulty encountered every time the project was analyzed seemed to be the generally unsatisfactory rate of return. Paralleling in point of time the studies which Pennsalt and Olin were making concerning the feasibility of building their own plants were several years of sporadic discussions between them relating to the possibility of entering the southeastern market by means of a joint arrangement of some kind. The joint venture agreement was the culmination of these discussions. The possibility of individual entry into the southeastern market had not been completely rejected by either Pennsalt or Olin before they decided upon the joint venture. At the time when the joint venture was agreed upon Pennsalt and Olin each had an extensive background in sodium chlorate. Pennsalt had years of experience in manufacturing and selling it. Although Olin had never been a commercial manufacturer, it possessed a substantially developed manufacturing technique of its own, and also had available to it a process developed by VickersKrebs with whom it had been negotiating to construct a plant. Olin had contacts among the southeastern pulp and paper mills which Pennsalt lacked, but Penn-salt’s own estimates indicate that in a reasonable time it would develop adequate business to support a plant if it decided to build. A suitable location for a plant was available to each company — Calvert City, Kentucky for Pennsalt, and the TVA area around Chattanooga, Tennessee for Olin. The financing required would not have been a problem for either company. In short, when the joint venture agreement was signed, Pennsalt and Olin each possessed the resources and general capability needed to build its own plant in the southeast and to compete with Hooker and Ampot in that market. Each could have done so if it had wished. While neither company was able to satisfy itself with the rate of return potential of an individually owned plant, the forecasts of each company indicated that a plant could be operated with profit. From the standpoint of profitability, however, Pennsalt and Olin both believed that they could make more money on their investment and that the risks would be less if their business were carried on through a jointly owned plant rather than by means of plants individually owned. The fact that Olin and Penn-salt each had the capability of building a plant and competing individually is of no controlling significance. It is important only as a factor in determining whether as a matter of probability both companies would have entered the market as individual competitors if Penn-Olin had not been formed. Only in this event would potential competition between the two companies have been foreclosed by the joint venture. Whether or not as a matter of probability Pennsalt or Olin would have constructed a plant of its own in the absence of Penn-Olin, need not be decided, for the reasons hereinafter stated. No evidence exists which will support a finding that if Penn-Olin had not been created Pennsalt and Olin would have simultaneously determined to build their own plants. Not only the inherent improbability of this occurring, but the protracted study which each company gave to the problem without arriving at an affirmative decision, negates such a likelihood. So that the best possible postulate on which the Government’s case can be based is that one company would have decided to build while the other continued to ponder. The decision by one company to build, however, might have had a bearing upon the decision of the other. The considerations which might induce one company to build its own plant when Hooker and AmPot were the only competitors would not necessarily be the same if a third competitor were about to enter the market. Pennsalt and Olin were each hesitant to build a plant of its own in a market occupied by two competitors. Whether the imminent presence of a third competitor might have made the prospect more or less appealing cannot be foretold. Neither company had ever faced the problem. The record affords no clue as to what action might have been taken if the problem had arisen. It is therefore impossible to conclude that as a matter of reasonable probability both Pennsalt and Olin would have built plants in the southeast if Penn-Olin had not been created. The most favorable assumption that can be made from the Government’s standpoint is that either Pennsalt or Olin — but not both — would have entered the southeastern market as an independent competitor if the two companies had not agreed to consolidate their efforts through Penn-Olin. Upon this assumption the effect of Penn-Olin was to eliminate Pennsalt or Olin, as the case may be, as a competitor. But even this hypothesized situation affords no basis for concluding that Penn-Olin had the effect of substantially lessening competition. Whether or not it did depends upon the competitive impact which Penn-Olin will have as against that which might have resulted if Pennsalt or Olin had been an individual market entrant. The Government argues that any such comparison is irrelevant and that a determination that Olin (or Penn-salt) would have built its own plant but for Penn-Olin automatically condemns the joint venture. Such an interpretation would cut the heart out of Section 7. The Section denounces a substantial “lessening” of competition. “Lessening” is a word of comparison. It demands that the competitive situation which the challenged transaction has brought about be compared with that which otherwise would have existed. Under the Sherman Act competitive conditions before and after a trade restraint must be examined to determine its reasonableness. Board of Trade v. United States, 246 U.S. 231, 238, 38 S.Ct. 242, 62 L.Ed. 683 (1918). A similar comparison is no less essential in determining whether a transaction otherwise within the reach of the Clayton Act will affect competition adversely. If Penn-Olin had the effect of keeping Pennsalt or Olin out of the southeastern market, it runs afoul of Section 7 only if competition generally in the southeast will probably be substantially less under the joint entry by Pennsalt and Olin via Penn-Olin than it would have been if there had been individual entry by either Olin or Penngaj£ In the classical horizontal combination case an appraisal of the competitive potential of each of the combining competitors can be made upon the basis of its prior record. Here there are no past records of Pennsalt or Olin that can be drawn upon to show their individual competitive effectiveness in the southeast, ■except those which pertain to the 1957-1960 period when Olin was acting temporarily as Pennsalt’s sales agent. They - establish a market penetration by Penn-.salt and Olin which was insignificant compared with that of Hooker and Am-Pot. What the competitive impact of Pennsalt or Olin might have been if ei•ther liad owned its own plant in the southeast cannot be determined from the record. Nor does the record disclose the competitive effectiveness, in terms of percent of business obtained or otherwise, which Penn-Olin has made since it began business, e y as a ma^er theory, how®ver> ™ reason exists to suPP°se that fenn-Olm will be a less effective empeta- ^or ^ban ^>ennsa ^ or woud bave been- The contrary conclusion is the more reasonable- Penn-Olm should be able to brmg to tbe southeast the agfagate contributions of both companies, A£ter a^> Penn-Olin is owned and managed h? both 01in and Pennsalt. Whatever manufacturing or marketing techniclues’ new Product usages or other advantageous operational procedures are known to 01in or Pennsalt can be expected to be brought to the attention of Penn- and utilized by it. Neither Pennsab: or bas any reason to suppress ^formation which will be of advantage to Penn-Olin. All three companies are in business to make money, and competitive effectiveness is essential to the achievement of this objective, Before trial, the Government interviewed and corresponded with a number of chemical companies and sodium ehlorate producers. In spite of this, no witness was called to testify that the vigor of competition in the sale of sodium chlorate had been, or is likely to be, lessened by Penn-Olin. Nor did the plaintiff introduce any testimony from purchasers of sodium chlorate who eomplained of any lessening of competition in the industry. Dirkson, Eastern General Sales Manager of AmPot, who called by the Government, testified that there had been no lessening in competition since the establishment of Penn-Olin and that he knew of no facts likely to lead to a lessening in the future. It