1913 Challenge
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A limited number of copies of the AMERICAN DIGEST OF BUSINESS MACHINES (1924) is available.  Use the link on the home page to find out how to get your copy.

The following is the text of the legal challenge to the Burroughs Adding Machine Company by the United States of America related to possible suppression of trade in early 1913.

 

To All Persons Engaged in the Sale of the Product of the Burroughs Adding Machine Company

Please find herewith copies of the Petition, Answers and Decree in the suit of the Government against this Company. You are instructed to read these carefully – particularly the Decree (printed on pages 22, 23 and 24), and the Court’s order approving these instruction (printed on pages 24 and 25) and subdivision “e” of paragraph IV of the petition (printed on pages 13, 14 and 15), and to accept the mandate of the Court as the instructions of this Company to you on the subjects mentioned in the Decree.

While wrongful or unlawful practices are absolutely prohibited, there is no objection to fair and legitimate competition, and you are expected to continue to use every honest, fair and honorable means of bringing the merits of the Burroughs machines to the attention of prospective buyers.

Yours very truly,

Burroughs Adding Machine Co.

Detroit, Mich. – April 5, 1913

 

Petition

In the District Court of the United States for the Eastern District of Michigan, Southern Division.

The United States of America, petitioner, v. Burroughs Adding Machine Company et al., defendants.

To the honorable Judge of the District Court of the United States for the Eastern District of Michigan, sitting in equity:

The United States of America, by Clyde I Webster, its attorney for the direction of its Attorney General, brings this suit, in equity, against the Burroughs Adding Machine Company (of Michigan), a corporation organized under and by virtue of the laws of the State of Michigan, and having its chief office at Detroit, in said State; the Burroughs Adding Machine Company (of Missouri, and having its chief office at St. Louis, in said state; Joseph Boyer, Benjamin G. Chapman, Claiborne W. Gooch, Alvan Macauley, Emil P. Wenger, Andrew J. Lauver, Frank H. Dodge, Albert S. Herrmann, E. St. Elmo Lewis, James C Walker, Alfred J. Doughty, Charles Macklin, residents of Detroit Michigan; Edward Rector, Joseph F. Gillen, residents of Chicago, Illinois; Henry Wood, Gustavus A. Buder, Marcus A Smith, residents of Larchmont, New York; Frank S Wheeler, a resident of New York City, New York; Lewis A Hennick, a resident of Boston, Massachusetts; P. K. Russell, a resident of Minneapolis, Minnesota; A. W. Saxe, a resident of Pittsburgh, Pennsylvania, and Fred T Miller, a resident of Oklahoma City,  Oklahoma.  The full names of those defendants whose names are given in part are not known to the petitioner.

 And on information and belief petitioner alleges:

 I.                     Grounds for Jurisdiction.

This action is brought under Section 4 of the Act of July 1, 1890, entitled “An act to protect trade and commerce against unlawful restraints and monopolies,” and it is sought hereby to restrain a further violation by defendants of Sections 1 and 2 of said act, by combining and conspiring among themselves to restrain the trade and commerce between the States in adding and listing machines and appliances, and also from further monopolizing said interstate trade and commerce by the methods hereinafter described. The combination and conspiracy herein attacked were entered into and are now being carried out in the Eastern District of Michigan, and the principal office of the defendant company, the Burroughs Adding Machine Company (of Michigan), is in said district, and its business policies are there adopted, and are directed therefrom.

II.                   Description of Defendant’s Business

In or about January, 1886, the American Arithmometer Company was incorporated under the laws of Missouri for the manufacture and sales of adding machines, being capitalized at $100,000, and having its principal place of business at St. Louis, Missouri, William Seward Burroughs, the inventor of the so-called Burroughs machine, was identified with this company.

In or about 1901 the defendant Joseph Boyer, who was the proprietor of the machine shop in St. Louis in which Burroughs’ experimental work was done, became president and acquired an extensive interest in the corporation aforesaid.  In or about 1904 the business and effects of said company were removed to Detroit, Michigan, and the Burroughs Adding Machine Company (of Michigan), hereinafter referred to as the defendant company, was incorporated on January 14, 1905, with a capital stock of $5,000,000, for the purpose of taking over the assets and business of the said American Arithmometer Company.

The business of the defendant company, like that of its predecessor, has been and is now that of the manufacture, sale, and shipment in interstate and foreign commerce of adding and listing machines and appliances for mechanically recording, tabulating, and computing series of numbers in accordance with familiar rules of arithmetic, said machine being now in general use by banks, railroads, and industrial companies, governmental offices, and in small as well as large business establishments, and being now generally regarded as a necessary standard commodity.

It has approximately 2,500 employees, including about 600 salesman and instructors in the field; maintains about 55 branch offices in various States of the United States, and has offices and agencies in Canada, the United Kingdom, France, Belgium, Germany, Austria-Hungary, Switzerland, Holland, Sweden, Denmark, Finland, Russia, Italy, Spain, Portugal, Egypt, South Africa, Japan, China, Australia, Mexico, Central America, Cuba, Porto Rico, Brazil, Argentine Republic, Chile, and Bolivia.

The Volume of its business has steadily increased until now it equals that of all its competitors combined, its sales amounting to approximately $8,000,000 per annum, or about 60 per cent of the business of the United States in the commodity aforesaid.

The defendant, Burroughs Adding Machine Company (of Missouri), is a corporation organized on July 9, 1909, under and by virtue of the laws if Missouri, with a capital stock of $10,000, having its office and principal place of business at St. Louis in said State.  It is not actively engaged in the manufacture of adding machines, although it apparently has some connection as a selling agency or otherwise with the defendant company.

The defendant, Joseph Boyer, for sometime past has been and is now the president and one of the directors of the defendant company. He was also for some time president of the American Arithmometer Company, the predecessor of the defendant company.

The defendant, Benjamin G. Chapman, for sometime past has been and is now secretary and treasurer and a director of the defendant company.

The defendant, Edward Rector, for sometime past has been, and until January 16, 1913, was vice-president and still is a director of the defendant company.

The defendant, Henry Wood, for sometime past has been and is now vice president and a director of the defendant company.

The defendant, Claiborne W. Gooch, since January 16, 1913, has been and is now acting vice president and a director of the defendant company.

The defendant, Gustavus A. Buder, for sometime past has been and is now a director of the defendant company.

The defendant, Alvan Macauley, for sometime past has been and is now a director of the defendant company.

The defendant, Walter B. Manny, since January 16, 1913, has been and is now a director of the defendant company.

The defendant, Emil P. Wenger, for sometime past has been and is now a director of the defendant company.

The defendant, Andrew J. Lauver, for sometime past has been and is now general manager of the defendant company.

The defendant, Frank H. Dodge, for sometime past has been and is now general sales manager director of the defendant company.

The defendant, Albert Herrmann, for sometime past has been and is now the office manager of the defendant company.

The defendant, E. St. Elmo Lewis, for sometime past has been and is now in charge of the advertising department of the defendant company.

The defendant, James C. Walker, for sometime past has been and is now in charge of the systems department of the defendant company.

The defendant, Alfred J. Doughty, for sometime past has been and is now the factory manager of the defendant company.

The defendant, Frank S. Wheeler, for sometime past has been and is now district sales manager, established by the defendant company, with his headquarters and place of business at New York, New York.

The defendant, Louis A. Hennick, for sometime past has been and is now district sales manager, established by the defendant company, with his headquarters and place of business at Boston, Massachusetts.

The defendant, Marcus A. Stith, for sometime past has been and is now district sales manager, established by the defendant company, with his headquarters and place of business at St. Louis, Missouri.

The defendant, Joseph F. Gillen, for sometime past has been and is now district sales manager, established by the defendant company, with his headquarters and place of business at Chicago, Illinois.

The defendant, Charles Macklin, for sometime past has been and is now district sales manager, established by the defendant company, with his headquarters and place of business at Detroit, Michigan.

The defendant, P. K. Russell, whose full Christian name is to petitioner unknown, for sometime past has been and is now district sales manager, established by the defendant company, with his headquarters and place of business at Minneapolis, Minnesota.

The defendant, Fred T. Miller, for sometime past has been and is now district sales manager, established by the defendant company, with his headquarters and place of business at Oklahoma City, Oklahoma.

The defendant, A. W. Saxe, whose full Christian name is unknown to petitioner, for sometime past has been and is now district sales manager, established by the defendant company, with his headquarters and place of business at Pittsburgh, Pennsylvania.

The several district sales managers, and each of them, have assisted and are now assisting in the execution of the policies and in the conduct of the business of the defendant company, each having charge of a great number of salesman, who sell the adding machines and appliances of the defendant company.

III.                 Conspiracy, Attempt to Monopolize and Monopoly.

The defendant company ever since its organization has been and is now attempting to monopolize interstate and foreign trade and commerce in adding machines and appliances, and has monopolized and is now monopolizing such trade and commerce in violation of the Act of July 1, 1890.

Certain of the individual defendants as managers, officers, agents, or employees of the defendant company, and its predecessor, have been and are now attempting to monopolize such trade and commerce and are monopolizing the same, and they and their predecessors in office ever since 1901 have conspired and they are now conspiring to restrain such trade and commerce in the commodities aforesaid, and have restrained and are now greatly restraining the same. Some of the overt acts committed in pursuance of said conspiracies, and the methods by which said restraints have been accomplished, are as follows.

IV.                Wrongful and Illegal Acts.

(a)     Attempt to Acquire and Suppress the Addograph Manufacturing Company.

On or about July 9, 1903, the defendant, Joseph Boyer, then president and acting on behalf of the American Arithmometer Company, the predecessor of the defendant company, secretly entered into an agreement with Hubert Hopkins, a director of the Addograph Manufacturing Company, a corporation organized under the laws of Missouri for the purpose of manufacturing and selling adding machines and shipping the same in interstate commerce, whereby a controlling interest in said competing company was obtained; and after the existence of this agreement because known to the minority stockholders of the Addograph Company, Boyer refused to protect them against injury arising from the ownership by his company of the majority interest in said company.

But in or about May, 1903, Boyer entered into a secret agreement with Simon Lederer, then acting vice president of the competing company aforesaid, whereby the said Lederer agreed with the said Boyer to serve on the board of directors of said competing company as the representative of the said Boyer and his interests, and to be guided in his capacity as director and vise president of said company in all matters pertaining to its business by the suggestions and directions of said Boyer.

Boyer’s purpose to get control of said competing company would have been accomplished had not James L. Dalton, president of said competing company, and some of his associates who remained loyal said company, obtained from its directors an exclusive license agreement to manufacturer adding machines under the patents owned by said company throughout the life of said patents.

On or about July 13, 1903, the said Dalton and his associates organized the Adding Typewriter Company, which name was later changed to the Dalton Adding Machine Company, for the purpose of carrying out said license agreement; which, though assailed by Boyer and his associates had disposed of their stock in Addograph Company to certain officers and stockholders thereof.

(b)     Attempt to Acquire and Suppress the Adder Machine Company

One of the competitors of the defendant company in manufacturing, selling, and shipping adding machines in interstate commerce is the Adder Machine Company, a corporation organized under the laws of New Jersey, in July 1902, and reorganized under the laws of Pennsylvania in January, 1906, with a capital stock of $750,000 and having its principal place of business at Kingston, Pa.  In or about November, 1906, certain of the defendants contracted to obtain control of the majority of the stock of said competing company for the purpose of acquiring its business and removing it from the field of competition.

And they did purchase a majority of the outstanding stock of said competing company and appeared in Wilkes-Barre, Pa., A few hours prior to the annual meeting of its stockholders on March 5, 1907, and openly declared their possession of same. In order to save the Adder Machine Company, its directors ordered issued 4,558 shares of stock, which was authorized but not previously issued, and purchased the same at a cost of $113,950.

And to further protect the company the holders of a majority of its stock entered into an agreement pooling their stock for a period of five years with provision for extension of the pool and vesting control of the stock in trustees names therein.

Shortly after the stockholders’ meeting of March 5, 1907, Albert S. Herrmann and other employees of the Adder Machine Company were given employment by the defendant company at its factory at Detroit, and the said Herrmann has for some time been and is now the office manager of the defendant company.

Prior to the annual meeting of the stockholders of the Adder Machine Company, in March 1908, the defendant, Joseph Boyer, and his associates, acquired 943 shares of the voting trust certificates; and thereupon said trust agreement was vigorously attacked in the courts of Pennsylvania by said Boyer and his associates acting in the interest of the defendant company, but its validity was sustained by said courts.

Following their failure to get control of said competing company by the methods aforesaid, the defendant, Joseph Boyer, files quo warranto proceedings in the Court of Common Pleas, Luzerne County, Pa., at the May term, 1909, against its officers and directors, seeking to oust them, but the Court denied the petition and dismissed the proceedings.

In addition to the foregoing acts, the defendant company, its managers, officers and agents acting on its behalf continuously from about the beginning of 1907 did endeavor to injure said competing company, by claiming and permitting its agents to assert that the defendant company did control or would shortly control said competing company, and that purchasers or users of said competitor’s product would be unable to get the proper service in the way of repairs or otherwise, and that the guarantee of said competitor was only a matter of a short time.

(c)     Acquisition and Suppression of the Universal Adding Machine Company.

The Universal Adding Machine Company was incorporated under the laws of Missouri in March, 1897, with an authorized capital stock of $250,000 which was increased from time to time until February 21, 1907, when it was fixed at $1,000,000.  Its office and principal place of business was in St. Louis, Mo.  It was for a number of years actively engaged in the manufacture and sale of adding machines under its patents, in competition with the defendant company.

For some time prior to July, 1908, the defendant Joseph Boyer, and others acting on behalf of the defendant company, contracted with certain parties for the purpose of acquiring the bonds and a majority of the stock of said competing company.

In or about May, 1908, William B Bull entered into an agreement with the defendant, Joseph Boyer, acting on behalf of the defendant company, whereby the said Bull for a consideration of $10,000 undertook to deliver and subsequently did deliver or caused to be delivered, to the defendant company bonds of said competing company amounting to $300,000 at their par value, and a majority of the stock of said company as a bonus or without consideration, upon the defendant company assuming an indebtedness of the Universal Company amounting to about $10,000.  And having thus acquired control, of the majority of the stock of the Universal Company, the defendant company subsequently acquired and closed its plant at St. Louis, removing its effects to the plant of the defendant company at Detroit, where it continued to market the machines manufactured by said competitor.

On September 16, 1908, the defendant company increased its capital stock from $5,000,000 to $5,250,000.

(d)     Acquisition and Suppression of the Pike Adding Machine Company

The Pike Adding Machine Company was incorporated under the laws of the State of Missouri in April, 1903, with an authorized capital of $500,000 and about August, 1903, it registered with the secretary of state of New Jersey and certified to an actual working capital of $150,000.

On December 7, 1904, said company was incorporated under the laws of New Jersey with an authorized capital of $500,000 which was increased in April, 1907, to $1,000,000 fully paid. Its principal place of business was at Orange, N. J.  It manufactured and sold under its patents an adding machine of the “visible” type, this feature being regarded by the trade as desirable because the progress of the calculation produced by operating the machine could be seen at its important stages.

Shortly after February, 1904, (when Edward G. Langborne, who had been general manager of the Universal Adding Machine Company, became its general manager), the financial affairs of this company became so embarrassed that it could no longer withstand the fierce competition waged against it be defendant company. And in May, 1909, the defendant company acquired the stock of said competing company, giving one share of Burroughs stock for three shares of Pike stock, and thereafter closed down the company’s plant at Orange and removed its effects to Detroit, where it has continued to make and sell the said “visible” adding machine.

In June, 1909, the capital stock of the defendant company was increased from $5,250,000 to $5,500,000 which is the present amount of its capitalization.

(e)     Means and Methods for Suppressing Competition.

In addition to the specific instances mentioned above, some of the other means and methods used by the defendants, as managers, officers, and agents of the defendant company, in restraining and injuring the interstate, and foreign trade and commerce of its competitors, and in attempting to monopolize and in monopolizing such trade and commerce, are as follows:  They have maintained a sales department and various other department divisions there under, for the purpose of suppressing competition. Said department was composed of an active head and other officers and departmental managers, and embraced a force of special man who were particularly instructed and directed to suppress competition. They have held or caused to be held conventions or schools of instruction attended by the agents and employees of the defendant company, where plans for suppressing competition were discussed, and such plans imparted to said agents and employees.

They have likewise instructed, or caused to be instructed, said agents to obtain information as to competitor’s sales, shipments, etc., said information when secured and reported to be used in suppressing competition.

They have instructed, or caused to be instructed, agents and salesman of the defendant company as to how to manipulate competitor’s machines for the purpose of showing alleged defects therein and dissatisfying competitors’ “users” or “prospects” therewith.

They have issued or caused to be issued statements reflecting on competitors, for the purpose of injuring their business, and they have supplied said agents with parts or illustrations misrepresenting the mechanism being sold by competitors, for the purpose of deceiving “prospects” or “users” of said competitors.

They have instructed or caused to be instructed their agents to secure the names and addresses of “users” of competitors, and lists showing the location and description of competitors’ machines on trial, for the purpose of interfering with the business of said competitors and to enable the defendant company, with its enormous resources to “outmatch” the “trials” of competitors.

They have adopted, or caused to be adopted. The policy of advertising for sale at reduced prices, competitors’ machines which defendant company had traded out or otherwise secured for the purpose of preventing sales by said competitors.

Said agents in other ways, too numerous to mention, were directed, advised, and instructed by said defendant to pursue the work of exterminating competition.

And said agents carried out the plans and purposes of the defendant company to suppress competition, restrain trade, and secure for the defendant company a monopoly of adding machine business.

(f)      Other Acts and Methods

The defendants, officers, managers and agents of the defendant company and its predecessors, during the period aforesaid, have continued to commit other wrongful and illegal acts too numerous to be herein set forth in general or in detail, but which were in furtherance of the conspiracy and attempt to monopolize, aforesaid; and have ratified, adopted and continued the policies pursued by their predecessors in said positions and have continued to obstruct the interstate trade and commerce of others engaged in the adding machine business, and have continued in their attempt to create and maintain a monopoly in such trade and commerce.

VII. Prayer.

In consideration whereof and inasmuch as adequate remedy in the premises can be obtained only in equity, the United States of America prays that your honor adjudge and decree:

First. That the conspiracy to restrain and monopolize the manufacturer and sale and the shipment in interstate and foreign trade and commerce of adding machines and appliances, and the attempt to monopolize and the monopoly of the same, as hereinbefore described, are unlawful, and that all acts done and to be done in furtherance of the same are in violation of the Act of July 2, 1890.

Second. That in or about 1901 the then officers, managers, and agents of the predecessor of defendant company, entered into a conspiracy to restrain and monopolize the manufacturer and sale and shipment in interstate and foreign commerce of adding machines and appliances, and that such conspiracy  and attempt to monopolize such trade and commerce and attempt to monopolize such trade and commerce has been carried on uninterruptedly by the said managers, officers, and agents of the defendant company and its predecessor up to the present time through the instrumentality of the defendant company and its predecessor as herein before alleged.

Third.  That the defendant company has been and now being used by said defendants, who are its managers, offices, and agents as the instrumentality or device whereby said conspiracy has been and is now being carried out and said monopoly has been and is now being maintained.

And your petitioner prays for the following specific relief:

(a)     That said defendant company and the other defendants and each of them be perpetually restrained, enjoined, and prohibited from carrying out such conspiracy or from engaging in, or carrying out any other conspiracy either among themselves or in connection with any other person or persons, to restrain and monopolize the manufacturer and sales and shipment or the sale and shipment in interstate and foreign commerce of adding machines or appliances, and from attempting to monopolize and from monopolizing such trade and commerce.

(b)     That said defendant company, and its directors, managers, officers, agents and employees, and each of them, and all persons acting or assuming to act for or under or in behalf of each other, be perpetually restrained, enjoined, and prohibited from stifling, suppressing, eliminating, or destroying, or from attempting to stifle, suppress, eliminate, or destroy the trade and commerce of any person, firm, or corporation engaged in the manufacture or the sales and shipment in interstate and foreign commerce of adding machines or appliances.

(c)     That said defendant company, and its directors, managers, officers, agents and employees, and each of them, and all persons acting or assuming to act for or under the behalf of them or either of them be perpetually restrained, enjoined, and prohibited from interfering with or directing or permitting others, under their control or under the control of either of them, to interfere with the business, machines, or appliances of competitors engaged in the manufacturer, sale, and shipment in interstate and foreign commerce of adding machines or appliances.

(d)     The said defendant company, and its directors, managers, officers, agents and employees, and each of them, and all persons acting or assuming to act for or under or in behalf of them or either of them be perpetually restrained, enjoined, and prohibited from further issuing or publishing or causing to be issued or published any instruction by document, circular, letter, verbally or otherwise, the purport or intent of which is to advise and instruct the agents and employees of the defendant company as to the various wrongful and unlawful means to be employed, in injuring and destroying the business of competitors; and from in any manner communicating to such agents and employees any of the wrongful and unlawful means and methods set forth in this petition, or any other wrongful and unlawful means in suppressing and destroying the business of competitors.

And your petitioner also prays for such other and further relief as the mature of this case may require and the Court may deem just and proper in the premises.

To that end, therefore, that the United States of America may obtain the relief to which it is justly entitled in the premises, may it please your honor to grant writs of subpoena directed to each and every one of the defendants commanding them and each of them to appear herein and answer, but not under oath (answers under oath being hereby expressly waived), the allegations contained in the foregoing petition and to abide by and perform such order or decree as the Court may make in the premises, and upon hearing hereof to permanently enjoin each of the defendants as hereinbefore prayed.

Clyde I Webster

United States Attorney for the Eastern District of Michigan

George W. Wichersham

Attorney General

J. A. Fowler

Assistant to the Attorney General

Malcolm A Coles

Special Assistant to the Attorney General

 

Answer

In the District Court of the United States for the Eastern District of Michigan, Southern Division.

The United States of America, Petitioner, v. Burroughs Adding Machine Company et al., Defendants,

The Individual Answer of Burroughs Adding Machine Company, of Michigan, Defendant, to the Petitioner of the United States of America.

This defendant, Burroughs Adding Machine Company (of Michigan), for answer unto said petition, saving and reserving to itself all manner of benefit and advantage of exception to the errors and insufficiencies in said petition contained for answer thereto says:

I.                     That except as next hereafter stated it admits that averments contained in the first paragraph of said petition to be true, but denies the implication in said paragraph contained that it is or has been guilty of violating Sections 1 and 2 of the Act of July 2, 1890, in said first paragraph mentioned and referred to. It denies that it is or has been guilty of the combination and conspiracy in said first paragraph of said petition mentioned.

II.                   That the averments contained in the second paragraph of said petition are substantially true.

III.                 That it denies the averments contained in the third paragraph of said petition.

IV.                 That it denies the averments contained in subdivision (a) of the fourth paragraph of said petition.

That as to the matters contained in subdivision (b) of the fourth paragraph, this defendant denies that it acquired or sought to acquire any stock or interest in the said Adder Machine Company, in said paragraph mentioned, and denies that it, said defendant company, its managers, officers and agents, acting on its behalf from about the beginning of 1907, or at any other time or times, did endeavor to injure said alleged competing company, in any way or manner in said subdivision (b) of said fourth paragraph alleged, or in any other way or manner.

That it admits the acquisition by purchase of the plant, machine and assets of the Universal Adding Machine Company, as is alleged in subdivision (e) of the fourth paragraph of said petition, and the increase of the capital stock of the defendant company, bit it denies all the singular and other averments contained in subdivision © of the fourth paragraph of said petition.

That the averments contained in subdivision (b) of the fourth paragraph of said petition are substantially true, but this defendant says that its alleged competition against the Pike Adding Machine Company was legitimate and lawful, and the acquisition of the stock and assets of said Pike Adding Machine Company by this defendant was not for the purpose or with intent of violating any of the provisions of said Act of July 2, 1890.

That it denies all and singular the averments contained in subdivision (e) of said fourth paragraph.

That it denies the averments of subdivision (f) of said fourth paragraph.

V.            This defendant answering said petition generally says that it has at all times observed the requirements of said Act of July 2, 1890, and that it has not at any time been guilty of any violation thereof.

All of which matters and things this defendant is ready to aver, maintain and prove as this Court may direct, and prays to be hence dismissed with its costs.

Burroughs Adding Machine Company (of Michigan)

By Standish Backus,

G. A. Buder

Solicitors for Said Defendant

Otto Kirchner,

Of Counsel

 

Answer

In the District Court of the United States for the Eastern District of Michigan, Southern Division.

The United States of America, Petitioner, v. Burroughs Adding Machine Company ET AL., Defendants

The Individual Answer of the Burroughs Adding Machine Company (of Missouri) Defendant, to the Petition of the United States of America, Petitioner.

The defendant, The Burroughs Adding Machine Company (of Missouri), for answer to the petition herein, answering says:

I.                     That it admits that it is a corporation organized and existing under the laws of Missouri.

II.                   That it denies all the other averments in said petition contained, and prays to be hence dismissed with costs.

Burroughs Adding Machine Company (of Missouri)

By Standish Backus,

G. A. Buder,

Solicitors for said Defendant.

Otto Kirchner

 

Answer

In the District Court of the United States for the Eastern District of Michigan, Southern Division.

The United States of America, Petitioner, v. Burroughs Adding Machine Company ET AL., Defendants

The Individual Answer of Joseph Boyer, Benjamin G. Chapman, Claiborne W. Gooch, Alvin Macauley, Emil P. Wenger, Andrew J. Lauver, Frank H. Dodge, Albert S Herrmann, E. St. Elmo Lewis, James C. Walker, Alfred J. Doughty, Charles Macklin, Residents of Detroit, Michigan; Edward Rector, Joseph F. Gillen, Residents of Chicago, Illinois; Henry Wood, Gustavus A. Buder, Marcus A. Smith, Residents of St. Louis, Missouri; Walter B Manny, of Larchmont, New York; Frank S. Wheeler, Of New York City; Lewis A Hennick, of Boston; P. K. Russell, of Minneapolis; A. W. Saxe, of Pittsburgh; and Fred T. Miller, of Okalahoma City, of the Defendants in the Petition named, to the Petitioner of the United States of America.

These defendants, not admitting the sufficiency of the petition herein, for answer thereto, answering say:

That they dent all and singular the averments in said petition contained and pray to be hence dismissed with costs.

The above named Answering Defendants,

By Standish Backus,

G. A. Buder,

Solicitors for said Defendant

Otto Kirchner,

Of Counsel.

 

Decree

In the District Court of the United States foe the Eastern District of Michigan, Southern Division.

United States of America v. Burroughs Adding Machine Company, and Others

FINAL DECREE

This cause coming on to be heard on this 3rd day of March, in the year nineteen hundred and thirteen, before the Honorable Clarence W. Sessions, District Judge, and the petitioner, the United States of America, appearing by its District Attorney, Mr. Claude I Webster, and by Malcolm A. Coles, its special assistants to the Attorney General, and the several defendants appearing by Standish Backus and G. A. Buder, their solicitors, and Otto Kirchner, of counsel, and it appearing from the petition that the Court has jurisdiction, and the Court having heard and duly considered the statements of counsel for the respective parties made in open court, among others the statement of defendant company’s counsel that the agents of defendant company may in some instances, in violation of their instructions and without the knowledge of defendant company, have been guilty of some of the acts charged in subdivision “e” of the IV paragraph of said petition, entitled “Means and methods of suppressing competition,” doth now, with the consent of said district attorney and said special assistant to the Attorney General, and the solicitor and counsel for defendants given in open court, order, judge, and decree as follows:

(1)   That the defendant company, the Burroughs Adding Machine Company (of Michigan), be and the same is hereby directed with all convenient speed to issue and deliver instructions in writing to all its servants and agents engaged in the sale of its products now or hereafter employed by it, to absolutely desist and refrain from interfering with or directing, or permitting others under their control or under the control of either of them, to unlawfully interfere with the business, machines, or appliances of competitors engaged in the manufacture, sale, and shipment, or in the sales or shipment in interstate and foreign commerce of adding machines or appliances, by inducing or trying to induce such purchasers to cancel their contracts with competitors and to return to such competitors the adding machines or appliances so purchased, or by wrongfully obtaining information respecting the business, sales, or shipments of such competitors, or by fraudulent or illegal means of inducing the employees of said competitors to give them such information, or permitting agents or employees of the defendant company, or of either of the individual defendants, to seek or to induce others to seek employment of said competitors for the purpose and with the intent thereby of wrongfully securing information as to the business of said competitors, or by any other method specific in said subdivision “e” of the IV paragraph of the petition, or by any other similar wrongful and unlawful means acquiring such information as to the business of a competitor, and such servants and agents and other person or persons connected with the defendant company are hereby perpetually enjoined from violating such instructions.

(2)     The said defendant company, the Burroughs Adding Machine Company (of Michigan), shall use all reasonable means and endeavors to have the instructions mentioned in the next preceding paragraph of this decree faithfully executed.

(3)     That the defendant company, the Burroughs Adding Machine Company (of Michigan), and its directors, officers, managers, agents, or employees, shall not hereafter acquire any controlling interest in the stock of any company engaged in business in competition with the defendant company, until and unless, upon written application so to do to this Court and due notice of such application to the petitioner in the cause, and upon hearing thereon, permission so to do shall be allowed by this Court. But this decree shall not be construed to prevent the directors, officers, agents, employees, or stockholders of the defendant company from purchasing for their individual account less than a controlling interest in the stock of any such competitor when such purchases or acquisitions are not made for the purpose of suppressing competition or restraining trade.

(4)     That this Court retain jurisdiction of this cause for the purpose of enforcing this decree.

(5)     That in all other respects the said petition be, and the same is hereby, dismissed.

C. W. Sessions,

United States District Judge,

Sitting by Designation.

 

Decree

In the District Court of the United States for the Eastern District of Michigan, Southern Division.

The United States of America v. Burroughs Adding Machine Company, ET AL.

Order approving proposed instructions to agents and employees of the defendant company.

This cause coming on to be heard on this 5th day of April, 1913, before the Honorable Arthur Tuttle, District Judge, upon the motion of counsel for the defendant company, asking the Court’s approval of the instructions to its agents and employees, herewith submitted and filed, which are proposed to be issued in compliance with the decree of this Court entered in this cause on the 3rd day of March, 1913, and asking the Court’s interpretation of a certain part of paragraph I of said decree, and the petitioner, the United States of America, appearing by its District Attorney, Clyde I. Webster, and by Malcolm A. Coles, its Special Assistant to the Attorney General, and consenting thereto and it appearing that this Court has jurisdiction under paragraph (4), of the decree of March 3, 1913, it is hereby adjudged, ordered, and decreed:

I.             That the defendant company, the Burroughs Adding Machine Company (of Michigan), issue to its agents and employees the instructions, in the manner and form submitted and filed with the motion aforesaid, directing them to observe the decree of this Court entered in this cause on the 3rd day of March, 1913.

(a)     The agents or employees of the defendant company from demonstrating its machine in a fair and lawful manner to users or prospective buyers of adding machines, without misrepresentation or improper and misleading operation of competitor’s machines, and

(b)     The obtaining by said agents and employees in a fair and lawful manner of usual trade data as to users or probable purchasers of adding machines, without employing any of the wrongful or unlawful means to obtain the same specified in paragraph (1) of the decree of March 3, 1913.

Arthur Tuttle,

District Judge.