Full opinion text
KLOEB, District Judge. This is a civil action initiated by the Government of the United States under the antitrust laws — sections 1, 2 and 4 of the Sherman Act, 15 U.S.C.A. §§ 1, 2, 4, and section 3 of the Clayton Act, 15 U.S.C.A. § 14. The complaint was filed on December 11, 1939. Sections 1 and 2 of the Act of July 2, 1890, 26 Stat. 209, 15 U.S.C.A. §§ 1, 2, commonly referred to as the Sherman Anti-Trust Act, as amended by the Act of August 17, 1937, 50 Stat. 693, provide in part, as follows: Sec. 1. “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal * * Sec. 2. “Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanor * * Section 3 of the Clayton Act, 15 U.S.C.A. § 14, reads in part as follows: “It shall be unlawful * * * to lease or make a sale or contract for sale of * * * machinery, * * * whether patented or unpatented, * * * on the condition, agreement, or understanding that the lessee or purchaser thereof shall not use or deal in the * * * machinery * * * of a competitor or competitors of the lessor or seller, where the effect of such lease, sale, or contract for sale or such condition, agreement, or understanding may be to substantially lessen competition or tend to create a monopoly in any line of commerce.” Section 4 of the Sherman Act reads in part as follows: “The several district courts of the United States are invested with jurisdiction to prevent and restrain violations of this act [sections 1-7 and 15 of this title] ; and it shall be the duty of the several district attorneys of the United States, in their respective districts, under the direction of the Attorney General, to institute proceedings in equity to prevent and restrain such violations. Such proceedings may be by way of petition setting forth the case and praying that such violation shall be enjoined or otherwise prohibited.” The defendants named in the complaint originally consisted of twelve corporations and one hundred and one individuals, the latter being officers, directors, or actors associated with the defendant companies in the activities complained of by the Government. Since the filing of the complaint, three of the corporations and forty of the individuals have been dismissed. A motion for summary judgment was made by the Stevenson Corporation and this was sustained before the commencement of the trial. The Anchor Hocking Corporation and the Liberty Glass Company each made motions to be dismissed upon completion of the plaintiff’s testimony, and these were sustained by the court. Two of the remaining corporate defendants and the individuals associated therewith — Corning Glass Works and Thatcher Manufacturing Company — filed motions for dismissal at the close of the plaintiff’s testimony, and argument upon these motions was heard by the court in the final argument of the case. These two motions, being as yet undisposed of, are hereby overruled. The forty individuals were dismissed in various ways— through the same motions for dismissal of the corporate defendants, by motion of the plaintiff at the conclusion of the case because of lack of evidence, and because of the death of some of them since the complaint was filed. The complaint is brought against the leading concerns in the glass container industry. It charges, generally, a violation of the anti-trust laws, “by unlawfully conspiring, monopolizing, attempting to monopolize, and by unlawfully contracting, combining, and conspiring to restrain interstate and foreign trade and commerce, and more particularly by acquiring and maintaining monopolies of (a) patents covering the manufacture and licensing of glass-making machinery, (b) the manufacture and distribution of glass-making machinery, and (c) the manufacture, distribution, and sale of glass products, and by excluding others from the fair ■opportunity to engage freely and unrestrictedly in the interstate and foreign trade and commerce in said machinery and glass products.” (Paragraph 34 of the complaint.) More specifically, in paragraph 37 of the complaint, it is charged: “Defendants herein have conspired, and are now conspiring, unlawfully to attempt to monopolize and to monopolize, and have unlawfully combined and now are combining to restrain trade, and such defendants have maintained and are now maintaining an unlawful monopoly or unlawful monopolies, and such defendants have, and now are, unlawfully restraining trade among and between the several States of the United States with respect to— “(a) Patents on automatic machinery for the production of pressed and blown glassware and glass containers; “(b) Machinery for the production of pressed and blown glassware and glass containers, and the distribution of such machinery; “(c) The manufacture and distribution of pressed and blown glassware and particularly heat-resisting glassware; “(d) The manufacture and distribution of all kinds of glass containers; “(e) The manufacture and distribution of milk bottles; “(f) The manufacture and distribution of fruit jars.” The relief prayed for requests generally that the court enjoin the illegal practices complained of, including the performance of the contracts between the various defendants, or the execution of similar agreements; that the court enjoin the holding of stock in another corporation in the industry by one corporate defendant, or an individual defendant connected with a corporate defendant; that the Hartford-Empire Company be dissolved and its patents and other properties be rearranged under several separate and independent corporations; and that such other relief be granted as may be necessary or the court deems proper. The defendants have denied any violation of the anti-trust laws in the manner alleged in the complaint. The Hartford-Empire Company, answering generally, avers: “These defendants deny that they, or any one or more of them, individually or with one another, or with anyone else, have intended to establish or maintain, or have established or maintained, any conspiracy or monopoly in restraint of trade or commerce, or have entered into any combination or agreement in restraint of trade or commerce, or have committed, or threaten or intend to commit, any violation of the Sherman Anti-Trust Act or the Clayton Act.” The position of the Hartford-Empire Company which, broadly, is the position of the remainder of the defendants with the exception, perhaps, of the Glass Container Association, whose situation differs from that of the other defendant corporations, is concisely set forth in the closing argument of defense counsel as follows (Record, page 11,526), “I want to say in conclusion, again, our position is that Hartford started out to create, started out to protect by patents what it did create, and to exploit its creation by appropriate means pointed out by the law and business custom. We claim that such domination of any part of the industry, either glass machinery or glass, as Hartford ever had, was only that inherent in the patents to which we believe we were entitled. That is what we sought, and that is what we got. The situation today is that the dominating adjudicated patents are those of Hartford’s own inventors.” Description of the Corporate Defendants. The defendant Hartford-Empire Company, hereinafter sometimes referred to as Hartford, is primarily a patent holding and developing company. It is a Delaware corporation, with its principal office in Hartford, Connecticut. It was organized in 1922 as the successor to the HartfordFairmont Company. The Hartford-Fairmont Company was organized in 1912 by a combination of interests of the BeechNut Packing Company, the Monongah Glass Company, and a group of Hartford engineers. In 1912, the Beech-Nut Packing Company was in need of a cheaper source of supply of glassware for its packing industry; the Monongah Glass Company was a glass manufacturing concern and had been supplying the BeechNut Packing Company with glassware; and the third group, comprised of engineers and inventors, was engaged in research work on automatic machinery for the production of glassware in the city of Hartford, Connecticut. The Hartford-Empire Company does not manufacture glassware of any kind except for experimental purposes. Its income is derived chiefly from royalties and fees obtained from the licensing and leasing of its machinery. The machinery is not made by Hartford but is manufactured for. it by the Hartford Special Machinery Company. The Hartford-Empire Company owns or controls substantially all of the gob feeding patents in the glass container industry. The defendant Corning Glass Works, hereinafter referred to as Corning, is a New York corporation, with its principal office at Corning, New York. It is the successor of two other corporations that date back to 1875. It is one of the largest manufacturers of glass products in the United States, engaged primarily in the production and distribution of incandescent bulbs, signal and optical ware, heat-resisting (Pyrex) ware, and other forms of specialty ware. The field encompassed by Corning is commonly known as the pressed and blown field, or the non-container field, as distinguished from the container field. Corning does not now engage and during the period of this inquiry has not engaged in the manufacture of glass containers, with the exception of a limited production of tumblers. The defendant Empire Machine Company, hereinafter referred to as Empire, was originally organized by Corning in 1909, under the laws of the State of Maine with its principal office at Portland, Maine, as a patent holding and developing company. Since 1922 it has owned substantially 43% of the stock of the defendant Hartford-Empire Company. Since the filing of the complaint in this case, the Empire Machine Company has been dissolved. It was represented in closing argument that there are no remaining assets of this company. The defendant Owens-Illinois Glass Company is an Ohio corporation with its principal office in Toledo, Ohio. It owns and operates a large number of glass manufacturing plants scattered throughout the United States. In December, 1895, the Toledo Glass Company was organized by Edward D. Libbey and Michael J. Owens for the purpose of developing Mr. Owens’ inventions in glass producing machinery. In 1903, Mr. Owens produced the first fully automatic machine for blowing bottles. This is known as the suction type of machine, in which the molten glass is sucked up into the mold, in contradistinction to the gob feed type of machine developed later, in which the molten glass is dropped through a hole in the bottom of .the tank or an extension thereof into the molds in a forming machine, the size and shape of the glass delivered being controlled by a mechanism known as a feeder machine. The feeder and the forming machine together constitute one unit fully 'automatic in operation, as distinguished from the Owens suction machine. The Toledo Glass Company caused the organization of the Owens Bottle Machine Company under the laws of New Jersey. This company was changed to the Owens Bottle Company in 1919, and in 1929 it was merged with the Illinois Glass Company and became the Owens-Illinois Glass Company. The corporate predecessors of the Owens-Illinois Glass Company operated for some years as manufacturers of glass making machinery, and licensed and leased glass manufacturers in the use of such machinery. About 1909 Owens began the actual manufacturing of glassware and gradually shifted its efforts away from the manufacture of machinery except for its own use. About 1904, Owens began the pursuit of a policy of granting exclusive rights to certain licensees in limited fields for the manufacture of glassware, and it obtained and maintained an influence over the industry which it thus divided by acquiring substantial stock interests in the licensed companies, such as Thatcher and Hazel-Atlas, defendants herein. The Owens-Illinois Glass Company is the largest manufacturer of glass containers in the United States. Its efforts are directed mainly toward the manufacture of what is known as narrow neck ware. It and its predecessors will hereinafter be referred to as Owens. The defendant Hazel-Atlas Glass Company, hereinafter referred to as Hazel-Atlas, is a West Virginia corporation with its principal office at Wheeling, West Virginia. It operates numerous plants, distributed throughout the country. It was originally incorporated in 1901 as the Atlas Glass and Metal Company and later merged with the Hazel Glass Company. It is the second largest manufacturer and distributor of glass container products in the United States. It directs its efforts chiefly to the manufacture of what is known as wide mouth ware. The defendant Thatcher Manufacturing Company, hereinafter referred to as Thatcher, is a New York corporation with its principal office at Elmira, New York. It was organized in 1905. Its efforts are devoted chiefly to the manufacture of milk bottles, and in this field it is the largest manufacturer and distributor in the United States. The defendant Lynch Corporation, hereinafter referred to as Lynch, is an Indiana Corporation with its principal office at Anderson, Indiana. With its predecessors, it dates back to 1917. It manufactures glass making machinery, and is the largest manufacturer of forming machines in the United States. It does not engage in the manufacture of glassware. The defendant Ball Brothers Company, hereinafter referred to as Ball Brothers, is an Indiana corporation with its principal office at Muncie, Indiana. With its predecessors, it dates back to 1882. It is the largest manufacturer and distributor of fruit jars in the United States. The defendant Glass Container Association, Inc., is a Delaware corporation with its principal office in New York City. It was organized in 1919 and is a statistical and research company. It does not engage in the manufacture of glassware. Its members include all but two of the glass container manufacturers in the United States. All of the corporate defendants herein are members of the Glass Container Association. History of the Case A brief resume of the history of automatic machinery in the glass container industry and of the contracts and agreements entered into by and between these various corporate defendants and complained of by the Government, is helpful to an understanding of the facts of the case. Acts and things done by the defendants and complained of by the Government cover a period of approximately 25 years. There are today two fully automatic processes for making glassware — suction and gob fed. In the suction machine process, the glass is sucked up from the surface of an extension of the furnace into the mold where it is formed into the desired product. In the feeder fed machines, the glass is delivered to the mold by a special device known as a feeder. In the gob feed process, the molds into which the molten glass is fed are parts of a separate machine known as a forming machine. In the suction process the molten glass is sucked directly into the molds. After the glassware leaves the forming machine, it is carried by a conveyor into a lehyr or closed tunnel, where it is stacked on a belt which moves slowly through an annealing chamber. The purpose of this, of course, is to prevent the finished product from cracking due to rapid changes in temperature. The bottles at the front end of the lehr are at a temperature of over 1,000 degrees Fahrenheit. The temperature gradually decreases as the bottle or container moves through the lehr. Upon its discharge the glass is cool enough to handle with bare hands. The complaint deals with all four of these types of machinery, that is, the suction machine, the feeder machine, the forming machine and the lehr. The suction machine was the first to appear and was the first fully automatic glassware manufacturing machine ever produced. It was put on the market in 1903 and immediately and completely revolutionized the industry, which had hitherto been limited to the hand-gathering method or to various types of semi-automatic methods. The Owens Bottle Machine Company possessed the exclusive rights on the suction machine. It licensed the use of that machine to manufacturers for specific kinds of ware, and thus set a pattern that was later followed by Hartford in the licensing and leasing of its automatic feeders. The Owens Company licensed Ball Brothers to make domestic fruit jars; it licensed Baldwin-Travis, later purchased by Thatcher, to make milk bottles; it licensed Hazel-Atlas to manufacture wide mouth ware; and it licensed the Illinois Glass Company to make narrow mouth ware. At the present time, only one of these licenses is outstanding, the license to Hazel-Atlas. However, Hazel-Atlas no longer uses the suction machine. Owens is the only concern that is now engaged in the use of that machine. As a result of the licensing by Owens of only certain manufacturers, the remaining manufacturers in the industry were faced with the prospect of being forced entirely out of business unless a competing machine could be found. Extensive research and development programs were financed. The Brooke stream feeder was produced, but this was unsatisfactory. The invention of suspended gob feeding followed. This gob feeder was found to be more economical for certain lines of ware than the suction machine, as the latter .was then constituted, due chiefly to its ready application in the manufacture of diversified kinds of glassware, whereas the suction machine was better for long and steady runs on one item. Owens today uses both methods, suction and gob, although its use of suction greatly predominates. Prior to the advent of the gob feeder, Owens had the whole field of automatic machinery for itself. Then, after the gob feeder was proved successful, Owens obtained certain patents and patent rights relating to that process, including the Brookfield and the Lott patent rights, and thereafter licensed a few companies in the use of its gob feeding machines. Hartford was one of the pioneers in the development of the gob feeder. It proceeded to license and lease gob feeders in much the same manner that Owens had theretofore licensed its suction machines, that is, by issuing licenses to make specific kinds of ware. Empire had been formed by Corning as a patent holding Company for the latter. Empire owned certain rights relating to the ’ Chamberlin applications. These applications were in interference in the Patent Office with the Hartford gob feeder applications. On June 30, 1916, Empire and Hartford entered into an agreement wherein Empire was granted an exclusive license to use the patented glass making apparatus and processes of Hartford for the production of pressed and blown glassware, and Hartford in turn was granted an exclusive license by Empire to use the latter’s patented glass making apparatus and processes for the production of glass containers. In this manner, and by this means, Empire obtained for Corning the exclusive right to Hartford’s machinery and patents in Coming’s lines of ware, to wit, the pressed and blown field or the non-container field; and Hartford retained a free hand with respect to the remainder. This is the first transaction that the Government complains of as a violation of the anti-trust laws. There followed agreements between Empire, Hartford and Corning on October 6, 1922, resulting in the formation of the Hartford-Empire Company, although the evidence discloses that the parties had agreed orally to the terms several years prior thereto. Hartford-Empire received all the assets of Hartford-Fairmont and all the assets of Empire Machine relating to the manufacture of machinery for the production of glassware. Empire received approximately 43% of the stock of Hartford-Empire. Corning received approximately the same exclusive use that Empire had received in the 1916 agreement, and Hartford-Empire received approximately the same rights from Corning that it had received from Empire in 1916, subject to a shop right in Corning that has never been exercised. From 1916 to 1924, competition had arisen between Hartford and Owens with respect to the gob feeding process. They were in interference in the Patent Office together with other • inventors who had invented, manufactured, and placed upon the market glass feeding machines. There was extensive litigation between the two companies. Numerous conferences were .held between officials of the two companies from 1921 to 1924, looking to a settlement of their differences. On April 9, 1924, Hartford and Owens entered into a written agreement by the terms of which Owens granted to Hartford an exclusive license on Owens’ patents relating to feeders and forming machines, and Owens received the right to use the Hartford patents for the manufacture of glassware. Owens was not to sell or license any of its gob feeding machinery. It was excluded from the pressed and blown field that had previously been reserved to Corning. Owens received one-half of Hartford’s divisible income over and above $600,000 per annum, to be collected by Hartford from its licensees. Section 22 of the agreement contained a provision that required Hartford to obtain Owens’ consent to the granting of any new licenses on machines embodying Owens’ inventions. In other words, Owens retained a veto power over the extension of licenses to use the gob feed machines of Hartford. This section was eliminated from the agreement in 1931. The agreement does not specifically mention suction machines, but, as will be shown later, it was the intention and understanding of the parties that there would be no undue competition between the suction and gob feed processes and that Owens intended to guard against any invasion of the suction field by anyone, including Hartford. Immediately after the consummation of this agreement, the two companies set out to obtain control of the remaining feeder patents in the industry, sharing equally the costs and expenses between them, combining the efforts of their legal staffs for joint operation against the owners of feeder patents, and contributing equally to the cost of purchase and litigation expenses. Their goal was to control the licensing and production of glassware in the entire industry. Hartford had purchased the feeder patents of the Howard Automatic Glass Machinery Company in 1921. In 1925, Hartford purchased the feeder patents of the W. J. Miller Company for $145,000, Owens sharing the purchase price. In the same year, Hartford purchased the feeder patents and applications of Tucker, Reeves & Beatty, sometimes referred to as the Federal Company, at a cost of $1,-600,000, Owens contributing one-half of the purchase price. Both Miller and Tucker, Reeves & Beatty had important patent rights and were in extensive interference proceedings with Hartford and Owens in the Patent Office. The Miller Company, before the sale to Hartford, had manufactured its feeders and had sold them outright to glass manufacturing concerns. After the acquisition of the Miller rights by Hartford, the latter brought suit against the purchasers and owners of Miller machines with the result that eventually nearly all of them became licensees of Hartford, and title to the feeders was surrendered to Hartford. Tucker, Reeves & Beatty had licensed its feeder machines. After the acquisition of the Tucker, Reeves & Beatty rights by Hartford, the licensees of the former promptly became licensees of the latter. Other feeder rights were obtained by Hartford through suit'or threatened suit. It is Hartford’s claim that all these patents or patent applications were dominated by Hartford’s patents and patent rights. However, it is well here to mention that no controlling patents were issued to Hartford until 1926, and these were not tested in the courts until 1932. Hazel-Atlas offered the strongest opposition to Hartford and Owens between the years 1924 and 1932. There was considerable litigation between them. Two important infringement suits were decided by United States Circuit Courts of Appeals in 1932, one in favor of Hazel-Atlas in the Sixth Circuit, Hartford-Empire Co. v. Nivison-Weiskopf Co., 58 F.2d 701, and one in favor of Hartford in the Third Circuit. Hartford-Empire Co. v. Hazel-Atlas Glass Co., 59, F.2d 399. Then, on July 1, 1932, Hartford, Owens and Hazel-Atlas entered into a series of agreements. Hartford granted to Hazel-Atlas the right to use Hartford patents and inventions, but Hazel-Atlas was not to license or sell such patents and inventions to anyone. Hazel-Atlas granted to Hartford the right to use Hazel-Atlas patents and inventions. Hazel-Atlas agreed to pay Hartford royalties for the use of the Hartford inventions. Hazel-Atlas was excluded from the pressed and blown field, which had previously been reserved to Corning. Hazel-Atlas and Owens were each to receive one-third of Hartford’s divisible income, that is, the income over and above $850,000 per annum that Hartford collected from royalties and license fees. The result of these agreements was that the remaining opposition to Hartford collapsed and everyone took a license from Hartford. At the time the complaint was filed in December, 1939, there were only four small companies engaged in the manufacture of glassware who were not under license and lease from Hartford, representing less that 4% of the total production in the industry. Three of these four companies are defendants in the courts at the hands of Hartford. The fourth company, the Kerr Company, manufactures glassware with the Brooke stream feeder and appears to be out of the reach of an infringement suit because the patents on that process have expired. The history of the forming machine control differs somewhat from that of the feeder history. The forming machine control ended with Hartford and Lynch manufacturing substantially all the forming machines for- the industry. Hartford had at an early date purchased the Cox forming machine patent rights, and in 1925, the year following its agreement with Owens, it purchased the Sears & Lobb applications; In 1924, Hartford, with Owens sharing equally in the cost, took an option on the Headley & Thompson forming machine applications controlled by the WhitallTatum Company. This option was exercised in 1933, when it appeared that the patents would issue with very broad claims and might dominate all narrow neck forming machines. Also in 1933,' Hartford purchased the O’Neill forming machine patents. Headley & Thompson had been in interference in the Patent Office for many years with Lynch. In 1933 the Patent Office held in favor of Headley & Thompson. Immediately thereafter, Lynch purchased the Ed. Miller forming machine business located in Columbus, Ohio, a manufacturer of forming machines for the manufacture of wide mouth glassware. This transaction was accomplished through the financial assistance of Hartford and Owens, each contributing to Lynch the sum of $125,000. In addition, Lynch raised $200,000 additional through the sale of stock, with W. E. Levis, President of Owens, underwriting the sale thereof. Two days later, on August 23, 1933, Hartford and Lynch entered into a cross-licensing agreement whereby Lynch was given the right to sell forming machines embodying Hartford patents and inventions to anyone who obtained a forming machine license from Hartford, and thereafter Hartford granted a forming machine license free of royalties to its feeder licensees but charged royalty rates equivalent to the rates on feeders to anyone desiring a forming machine who was not a feeder licensee. In view of the fact that Headley & Thompson, now controlled by Hartford, was claimed to have dominated the Lynch forming machines, the result of the agreement was that Lynch could sell no narrow neck forming machines except to persons who had first obtained a forming machine license from Hartford. The Ed. Miller acquisition placed in the hands of Lynch wide mouth forming machine rights, and these apparently did not come within this requirement. This is the only situation in which the Government claims there is a violation of the Clayton Act. Owens had already obtained an -option on all present and future Hartford inventions in the suction field. In the purchase of the Ed. Miller Company by Lynch, the latter secured certain suction rights of the Miller Company. Owens purchased these from Lynch, in addition to any other suction rights which Lynch might have. Also in 1933, Owens purchased the Knox-O’Neill vacuum machine rights. As a result of these transactions, Owens substantially completed its program for the acquisition of all suction rights in the United States. So far as the record is concerned, no one can now manufacture and use this type of machine without the consent of Owens. While it is true that the original suction patents have expired, Owens has improvement patents which make it impossible for anyone to get a modern version of the machine. Owens, since 1924, has refused to license or sell its suction machines to anyone who did not already have a license. In 1934, Hartford attempted to purchase the lehr business of the Amsler-Morton Company and, failing in that, sued the Swindell Brothers, a manufacturer of glassware who had purchased some lehrs from Amsler-Morton. Under the terms of the contract of sale, Amsler-Morton was compelled to defend this suit. It was limited in its defense of the suit, however, because Swindell was under license and lease from Hartford and had agreed not to contest the validity of Hartford’s patents. Hartford prevailed in the Circuit Court of Appeals and Amsler-Morton was enjoined from further manufacture of lehrs. On December 6, 1937, Hartford purchased title to the Nagle lehr from the Thatcher Company, and thus completed its control over the manufacture and licensing of all lehrs used in the glass container industry. It is contended by Hartford that there are in existence three or four other concerns that engage in the manufacture and sale of lehrs, but these are of so little consequence as to be negligible. Thatcher obtained the exclusive right to manufacture milk bottles on Hartford’s original paddle needle feeder in 1920. Hartford’s first effort at the invention of a gob feeder resulted in what was known as the paddle feeder, and it came into production about 1916. The paddle needle feeder followed thereafter. Then came the single feeder, which is the machine in general use today. Prior to 1920, Thatcher had the exclusive right to manufacture milk bottles on the Owens suction machine. This was obtained early in the history of Owens, at a time when Owens obtained substantial stock holdings in Thatcher. All the other milk bottle manufacturers were gradually brought under the Hartford licensing system and, with the exception of the Liberty Glass Company, a small Oklahoma concern, were restricted in quantity. Owens also has an unlimited right to make milk bottles. Approximately two-thirds of all milk bottles manufactured and sold in the United States are manufactured by Owens and Thatcher. Prior to 1933, Ball Brothers was the largest manufacturer of domestic fruit jars, but Hartford had never been able to license that company. Ball Brothers had operated on machines of its own design, as well as on the suction machine of Owens, the right to the latter having been obtained early in the life of the Owens-Company. On March 25, 1933, Ball Brothers took a license from Hartford and also obtained the residual rights of Hartford in fruit jars. As a part of this transaction, several companies that were engaged in the manufacture of fruit jars under license from Hartford sold back to Hartford their limited fruit jar rights, or sold them to Ball Brothers. General Glass Company sold its fruit jar rights back to Hartford. The Knox Company sold its fruit jar rights to Ball Brothers, with Hartford cooperation. Brockway’s fruit jar business was sold to Ball Brothers by and with the cooperation of Hartford. Gayner did likewise under similar circumstances. Much discussion was had as to the rights of Hazel-Atlas and Owens to manufacture fruit jars, and it was proposed that they be limited by written agreement to 300,-000 gross and 100,000 gross annually, respectively. It was finally decided to refrain from setting such a restriction down in writing. However, since that date, neither of these companies has in any one year exceeded these limitations, with but one negligible exception. There is one additional manufacturer of fruit jars, the Kerr Glass Company, and that company is not a licensee of Hartford. At the time the complaint was filed, Ball Brothers manufactured approximately 54.5% of all the fruit jars manufactured and sold in the United States, Hazel-Atlas 17.6%, Owens 6.4%, and Kerr 21.5%. In 1935, the agreements between Hazel-Atlas, Hartford and Owens were revised, although they were originally designed to run until 1945. At the time of the revision, Hartford purchased Owens’ right to participate in Hartford’s divisible income for the sum of $2,500,000. This whole system of purchases, agreements and mergers has resulted in a situation where less than 6% of the total production of glassware on feeders is on feeders not owned or controlled by Hartford, and this represents less than 4% of the total production on all types of machinery. The only other substantial production is that of Owens on its suction machines, and of course Owens does not have to pay royalties on its suction production. It is impossible for anyone to obtain a feeder, machine except by virtue of a license from Hartford. Owens has consistently refused to sell or license its suction machine. The same is true of forming machines and lehrs — a license must be obtained from Hartford. The result is that no new concern may engage in the manufacture of glass containers except with the consent of Hartford extended through a license to use its machines — feeders, formers or lehrs. During the life of Section 22 of the 1924 agreement between Hartford and Owens, Hartford was required to consult Owens before it issued a license to any newcomer in the industry. As a result, it is contended by the Government, no newcomers have been admitted into the industry during the entire existence of the Hartford Company. Hartford claims that it has licensed two newcomers, the Northwestern and Diamond companies. Although Section 22 was stricken from the 1924 agreement by Hartford and Owens in 1931, yet the record indicates that adherence to the requirements of this agreement has been carried on since 1931 without the necessity of a written agreement. The Nature of the Case. At the outset, it is well to consider that this is a conspiracy case; that the alleged conspiracy must be looked at as a whole; that if the conspiracy as a whole is an unlawful one, then the Government has made out a case for relief. In Standard Oil Company v. United States, 1911, 221 U.S. 1, at page 75, 31 S.Ct. 502, at page 520, 55 L.Ed. 619, 34 L.R.A.,N.S., 834, Ann.Cas.1912D, 734, the Supreme Court laid down the principles followed by it in ascertaining the intent of the parties to restrain trade, to monopolize, and to bring about monopolization. The Court there said: “the prima facie presumption of intent to restrain trade * * * is made conclusive by considering (1) the conduct of the persons or corporations who were mainly instrumental in bringing about the extension of power in the New Jersey corporation before the consummation of that result and prior to the formation of the trust agreements of 1879 and 1882; (2) by considering the proof as to what was done under those agreements and the acts which immediately "preceded the vesting of power in the New Jersey corporation, as well as by weighing the modes in which the power vested in that corporation has been exerted and (3) the results which have arisen from it.” It may be well, therefore, in order to determine the intent of the parties involved in the case at bar, to consider, first, the conduct of the parties who were the main actors, second, the proof as to what the actors said and did, and, third, the results which their activities accomplished. A total of one hundred and twelve days was consumed in actual time of trial and arguments. The evidence produced is voluminous. The record of testimony and argument consists of over twelve thousand pages. There are over three thousand exhibits, consisting chiefly of letters, contracts and memoranda, that are considerably more voluminous than the record of testimony. This is primarily a documentary case. In the course of the trial, many of the chief officers and attorneys for the defendant corporations appeared as witnesses at the behest of the Government. Their testimony was utilized primarily for the purpose of identifying letters, memoranda and contracts that form the history of the case. Some of these witnesses conscientiously observed their oaths and freely disclosed matters within their knowledge; some of them quite apparently were testifying under difficulty because of the long period of time covered by the inquiry; and some of them, unfortunately, were clearly reluctant to make disclosures that their apparent physical and mental capabilities, and the positions occupied by them in the industry, would credit them with knowing. The reticence of some of the key witnesses to disclose what plainly was within their knowledge as principal actors in the main conferences that occurred over a period of time, and that resulted in the consummation of important agreements, was of such a pronounced character as to discount substantially the weight of their testimony, and their credibility, in the eyes of the court. From a study of the entire record, I am convinced that there has not only been a violation of the anti-trust laws, beginning with the first agreement between Hartford and Empire in 1916, but I am convinced that this violation of the laws was as deliberate as any that I can find in a review of anti-trust cases. The evidence is so conclusive that I can arrive at no other conclusion. In many cases the court is required to rely upon inferences derived from circumstantial evidence, so meager is the record before the court; in many cases the court must rely upon inferences from some direct as well as circumstantial evidence and arrive at its conclusions accordingly; in this case, the men who planned and directed the proceedings under scrutiny, from 1916 down to the time of the filing of the complaint herein, left behind them numerous exchanges of letters and many memoranda executed contemporaneously with the happening of the main events and designed for the information of their contemporaries, their beards of directors, or for their successors in office. It is hard to imagine a case in which a court would have more first-hand information of what the parties did and intended than in the case at bar. These documents indisputably make a case that sustains the Government’s contention that the defendants have violated and are now violating Sections 1 and 2 of the Sherman Act and, in the case of Hartford and Lynch, Section 3 of the Clayton Act, “by unlawfully conspiring, monopolizing, attempting to monopolize, and by unlawfully contracting, combining, and conspiring to restrain interstate and foreign trade and commerce, and more particularly by acquiring and maintaining monopolies of (a) patents covering the manufacture and licensing of glass-making machinery, (b) the manufacture and distribution of glass-making machinery, and (c) the manufacture, distribution, and sale of glass products, and by excluding others from the fair opportunity to engage freely and unrestrictedly in the interstate and foreign trade and commerce in said machinery and glass products.” Now let us examine into the conduct of the principal actors, the proof as to what was done by them, and the results that have arisen therefrom, in order to arrive at the intent of the parties. The Conspiracy as Related to Feeders. Corning and Empire. There is very little evidence prior to the 1916 agreement between Hartford and Empire. The evidence does show that the two companies were in interference in the Patent Office through a conflict in the Chamberlin applications of Empire and the Peiler applications of Hartford, and that the two companies decided to settle their differences by leaving the container field to Hartford and the non-container field to Empire. Empire had been formed by Corning and Corning produced only in the non-container field at that time. So far as the production of Corning was concerned, it received everything that it desired. Hartford was given the container field, much larger than the field left to Empire, but, of course, not as large as the whole field. While one purpose of the agreement was to settle patent interferences, the effect of the agreement was also to divide the field between them with a provision that they; would not compete in each other’s field. The agreement not only divided the fields of ware by giving the container field to Hartford and the non-container field to Corning, but it eliminated the impending competition between Hartford and the Corning interests in the glass making machinery field. In this connection it is well to note that Corning had “consistently maintained that the contract was a continual exchange of inventions and developments for prescribed fields regardless of patents.” (Ex. 358) There is considerably more evidence in the interim between the agreements of 1916 and 1922 between these companies which sheds light not only on the purpose of the 1922 agreements, but also on the purpose of the 1916 agreement. Some time in the year 1919, F. Goodwin Smith, who was at that time general manager and who later became vice-president and then president of Hartford, wrote a memorandum concerning the proposed merger of Hartford and Empire. It reads in part as follows (Ex. 6): “Working as one unit properly financed and properly organized, this unit owning or controlling the most modern patented automatic machine process for the various fields of ware — plus special glass formulas, would, within reasonable time, dominate the entire glass industry here in the States as far as manufacturing methods are concerned * * * “The talent of both organizations combined should at once insure continual improvements in the art and in the design of the machines, which would insure the maintenance of leadership and practically prohibit any other organization from obtaining parallel results. “Hartford or Empire working alone as individual units will to some degree block each other on the question of patent rights, whereas working together on a basis of exchange of patent rights, the position of each, singly or together, would be greatly strengthened.” This exhibit clearly shows that Hartford was at that time looking to a merger that would result in its domination of the art. Exhibit 7 is a memorandum prepared by the same author, setting forth what occurred at a conference at South Dartmouth, Massachusetts, on August 2, 3, and 4, 1919, between A. B. Houghton, A. A. Houghton, Dr. Day and Alexander Falck, representing the 'Corning and Empire interests, and F. Goodwin Smith, the author of the document, representing the Hartford- interests, concerning the proposed Hartford and Empire merger. It reads in part as follows: “Also told them that it was quite apparent to us that we must either proceed independently on a very much ’arger scale than we had in the past, or else consider the desirability of entering into negotiations with the Owens interests, Banking interests, or with the Empire Machine Company’s interests. * * * ” Houghton said, “That there should be no secret that if we thought a merger was not the proper procedure for us, they must immediately start an entirely separate company for intensive machine development— and that unquestionably this would result in additional competition and raise the continual question of rights between the Owens group, ourselves, and the Empire group. “He therefore thought, all points considered, that if we pooled our entire interests into one company on a 50-50 basis, it would be a proposition which would have a very large and successful future before * * # “There is no question in my nfind but what the Owens Co. will increase their efforts to attack our patents as applied to all machines which we produce. This will prove costly as regards litigation, and may prove costly as regards some necessary changes. “I also feel that the Owens Co. Will be forced to let down the bars as regards their present royalty basis as received from their present, licensees, which would at once create keener competition between the large Owens groups of manufacturers and our licensees. * * * “I also feel that it will be a very disturbing factor to have the Empire Machine Co. start out with a large capital and proceed to come into the field with a still separate line of automatic machinery.” The last paragraph clearly shows that Hartford wanted to eliminate a competitor. Exhibit 8, written by W. H. Honiss, patent counsel for Hartford, dated October 4, 1919, to F. Goodwin Smith of the same company, reads in part as follows: "In connection with your expected conferences of next week, it may be of use to remind you of some of the assets of the HartfordFairmont Company which, in aggressive hands, our own or others, might be made very useful in limiting competition.” Exhibit 9 is a memorandum written by F. Goodwin Smith in 1920, commenting on • the proposed Hartford and Empire agreement. It reads in part as follows: “Will not the combined ownership of patent rights dominate the Federal situation so as to preclude this Federal feeder becoming a competitor here in the States, as well as across the water? * * * “Any concern which can offer the use of automatic machinery and special formulas ought to eventually control the key to the glass industry in this country and foreign countries. * * * ” From the foregoing excerpts, it will be seen that as early as 1919 and 1920, Hartford was looking toward complete control of the gob feeding art; that it wanted to eliminate the competition of Empire and combine the assets and talents of both concerns in the ultimate fight for control; and that it thought their combined rights would dominate the Federal feeder, otherwise known as the Tucker, Reeves & Beatty feeder, an important rival which Hartford must necessarily face in the near future. An important consideration for Corning in these negotiations was its relationship with the General Electric Company in the manufacture of electric light bulbs. General Electric was a licensee of Corning in the manufacture of bulbs. On October 30, 1920; V. M. Dorsey, patent counsel for Coming, wrote-to A. D. Falck, president of that company, as follows (Ex. 677) : “I expressed an opinion that the whole bulb situation would be strengthened if a monopoly could be gotten into one hand, of the Flowing field, with right to take bulb licenses from the owner of such monopoly, and that unless the HartfordFairmont Company succeeded in doing this, as they expected to do, there would be a purely competitive field which would seriously injure the monopoly in the cheapest way of producing bulbs.” The monopolistic intention of Corning in entering into the agreements in 1916 and 1922 is further stated in another letter from Dorsey to Falck, dated September 24, 1921 (Ex. 1988): “I have been forced to consider what we really intended to get under this Ware, Class D. As originally defined five years ago, it had two possible purposes,— “(1) To prevent the use of the Hartford machines by others in the manufacture of baking ware, irrespective of the quality of the glass. “(2) To let Corning use the Hartford inventions in baking ware, milk bottles, etc., if we should discover a new glass not containing boric oxide, but still useable. “Since that time, Ware Division C has been broadened out in one way so that it no longer demands the use of boric oxide in the glass, but covers all that we really consider good glasses. “From this it seems to follow to me, that Ware Division D could be now well changed to cover only glass-ware in which food is cooked in an oven, i. e., OvenWare. This will prevent our baking dish competitors from using the HartfordFairmont inventions without our consent, for making competing ware in the baking field, and will permit us to license them to make such ware with the Hartford invention even though the glass is of inferior quality.” It will be seen from the foregoing that the intention of Corning in entering into the original agreement with Hartford in 1916 that effected a division of the fields of ware was not primarily to settle interferences that then existed in the Patent Office involving the Chamberlin patents of the Empire Company and the Peiler patents of Hartford. The primary intention was “to prevent the use of the Hartford machines by others in the manufacture of baking ware.” It was to “prevent our baking dish competitors' from using the Hartford-Fairmont inventions without our consent.” And it was to “permit us to license them to make such ware with the Hartford inventions even though the glass is of inferior quality.” This, of course, meant that the competitors would be charged royalties even though the output was of inferior quality. The agreements of 1922, including the so-called “Formation Agreement,” effectuated a merger of the Hartford-Fairmont and Empire companies into what thereafter was known as the Hartford-Empire Company. The relations between Hartford and Corning were renewed and strengthened. In 1930 and 1931, negotiations were had between officials of Corning and Hartford with a view toward revising the contractual relationship between the two companies. H. K. Smith, secretary and general counsel of Hartford, prepared a memorandum on December 29, 1930, setting forth the status of the discussions on revision of the contracts. Speaking of the question of the respective fields for the two companies, he stated (Ex, 392): “This is by far the most difficult and important point of difference between the two Companies. It is very complicated; it is rather hard to get any general principle which will apply throughout for a division of fields and it is hard for each party to foresee the course which the glass industry may take in the coming years. “It is my impression that Judge Green and I have reached a very vague agreement to the effect that, with many exceptions and reservations, the Corning field is, naturally, the monopolistic high quality field and the Hartford field is, naturally, the competitive low quality field. But as soon as we begin to go any further in detail, we arrive at serious differences. * * * “Corning also raises the question of whether it cannot have a right to make containers out of ordinary glass at standard royalties. To grant any such right is contrary to Hartford’s present and long established policy of endeavoring to limit competition between its licensees within reasonable bounds, and Hartford, especially at present, would be quite adverse to putting into this very competitive field a new and powerful competitor.” On March 3, 1931, the same author wrote a memorandum “On the Revision of Glass Contracts Protecting Monopolies.” It reads in part as follows (Ex. 393) : “1. The present Glass Contract” — between Corning and Hartford — “gives now * * * what Corning wants; namely, Hartford’s support and protection of Coming’s monopolies. The proposed new contract, in the form Corning wants, will do the same, but over a much wider scope, i. e., as to furnaces, handling and finishing devices, and lehrs, in addition to feeders and formers. “It, therefore, raises the basic question in more acute form. “2. What Corning wants is that H-E should so tie up all H-E’s inventions as to protect Coming’s special fields from competition by H-E’s licensees or assignees, even after the failure or expiration of the patents now covering those fields. * * * “Now, what support, conversely, can HE expect for its monopolies from Corning? Assume that H-E feeder patents fail or expire. How will our hold on glass feeding be saved or improved by anything coming from Corning under the Glass Contract ? “This contribution and support of Corning for our monopoly is not very imposing. * * * “11. I do not see that the addition of furnaces will alter the principles above. (a) It is, however, a very important addition. Probably the next greatest advance will come here. It will have the special advantage of reducing costs without increase of production. (b) A real patent or patents in this line would be a powerful support for our respective monopolies. For practical reasons a merger of interest here is desirable, because furnaces are used for all fields, and separate development programs mean waste and possibly patent deadlock.” It will be seen from this that Corning was looking forward to the day when its patents on the so-called Pyrex oven ware, known as heat resistant ware, would expire, and was making arrangements so that it would have the exclusive use of the Hartford feeders for the making of heat resistant ware in the years thereafter. This is the exact situation that obtained at the time of the filing of the complaint herein. Again, quoting from the same document: “32. Protection of Monopolies — This is perhaps the most difficult question remaining. We agree on the general principle that it is desirable that each party should use its patent strength to protect the exclusive fields of the other.” This plainly is an illegal, cooperative effort upon the part of Corning and Hartford to use the patent strength of each to protect the exclusive fields of the other. It is a cooperative effort for the purpose of maintaining monopolies. From the above extracts, it is plain that the purpose of entering into this contractual relationship, both in 1916 and 1922, was, from Hartford’s viewpoint, to eliminate Empire as a possible competitor in automatic machinery, to obtain Coming’s support in getting and maintaining a monopoly on automatic machinery, and to eliminate Corning as a manufacturer in the container field; and, from Coming’s viewpoint, to obtain from Hartford a monopoly in the manufacture of non-container ware. The result of these contracts was to give Corning the power to exclude all others from Coming’s fields. During the years that followed down to the filing of the complaint herein, there are many instances where manufacturers were kept out of Coming’s fields, either by Hartford alone or by Coming’s refusal to consent to their entrance into its fields. Hartford refused requests by Fry Glass Company, Mantle Glass Company, Owens, Bartlett-Collins and Swindell Brothers. Corning refused to consent to the licensing of MacBethEvans, Fairmont, Indiana Glass Company, McKee, and Anchor Hocking. The record does show that in two or three instances limited licenses were granted in this field with Coming’s consent. Coming’s valuable glass composition rights for heat resistant ware and oven ware expired in 1936, but Hartford refused to license anyone to make this ware on its feeders, thus helping Corning to maintain its monopolies. The contract between Corning and Hartford does not in itself give Corning any control over the future policies of Hartford. But that Corning does exercise such a control consistent with its own desires is clear. A. D. Falck, president of Corning, in exhibit 676, dated June 8, 1920, wrote that it was decided “not to make this request, as we have entire confidence in you and your group. We will, however, wish to participate actively in formulation of policies and major decisions, and I assume from what you have said to me that this will be your desire.” Also, F. Goodwin Smith of Hartford wrote to A. D. Falck on October 27, 1927 (Ex. 271): “at the time of the formation of the Hartford-Empire Company, you considered Empire’s minority holdings of 45% amply protected, as Beech-Nut, Hartford and Monongah represented to you three separate and distinct holdings, and, further, that these three groups might not always agree among themselves. Therefore, from a practical standpoint the 45% held by Empire was to all intents and purposes as good as control.” In addition to the 45% of the stock of Hartford that is held by Corning through Empire, the record indicates that there have always been at least four of eight to nine members of Hartford’s board of directors who were also directors of Corning or Empire. Hence Corning not only had an exclusive license from Hartford covering the non-container field, but it also in practical effect had sufficient control over Hartford to dictate the policies of Hartford in accordance with Coming’s wishes. In 1922 these two companies, Corning and Hartford, did not have an actual monopoly of feeders. At that time there were four serious competitors of Hartford,. in the gob feed field. These were the Howard Automatic Machinery Company, the Owens Bottle Company, the William J. Miller Company, and the Federal Company, the latter having control of the Tucker, Reeves & Beatty feeder rights. Hartford was in litigation and interference with all these companies. But by the end of 1925, Hartford owned or controlled all the feeder rights which these companies possessed. Howard. The Howard interests were the first to come under the control of Hartford. This was accomplished by outright purchase. Howard had licensed some of its machines and in taking over the patent rights it was necessary that Hartford prevent the Howard licensees from obtaining a defense of estoppel against Hartford, in order to leave Hartford free to sue them and force them to take licenses from Hartford. To this end the Beech-Nut Packing Company, which was one of the original organizers of Hartford, purchased the stock of Howard and then transferred it to the Hartford Special Machinery Company, which in turn transferred to Hartford all the Howard patent rights. We shall later see just what relationship an involved transaction of this kind has to the reference of the Supreme Court to “manifestations of guilt.” The purpose of Hartford in entering into the Howard transaction is clearly expressed by F. Goodwin Smith of Hartford in a statement to his Executive Committee on June 23, 1922, as follows (Ex. 58): “If outstanding, he presents a very serious competitor commercially. * * * “The sale of Howard to Owens would be distinctly disastrous, probably the worst single thing that could happen. That Owens has twice tried to buy out Howard, making considerable offers therefor.” That Howard was an active competitor of Hartford is further shown in a statement by V. M. Dorsey, patent counsel for Corning and Hartford, on April 12, 1922 (Ex. 57) : “Howard has a going business and a feeder which can compete with ours unless properly shut up.” The same author wrote to F. Goodwin Smith on December 27, 1921 (Ex. 1522): “I repeat what I have said before that so far as affects the suppression of piracy and control of the gob feeding art, I believe the deal with Howard is more effective than any deal you can make with Owens. * * * “ * * * I again say that you will not by reason of your deal with Owens be able to stop pirates. * * * On the other hand, the deal with Howard permits an immediate, effective, offensive campaign coupled with the necessity of protecting our rear from Owens.” Thus it i