Business: Goodyear Dammed

It looked last week as if Harvey Samuel Firestone had acquired a new spear for his running joust with the mail-order tire. To Harvey Firestone, an embattled individualist, all the woes of the rubber world are compressed in the cheap tires which his three big competitors — Goodyear, Goodrich and U. S. Rubber — manufacture but which the mail-order houses (and a few chainstores) sell under their own brand name (TIME, April 10). Harvey Firestone’s spears in the past have been price-cuts and letters to his stockholders impaling his Akron neighbors. This time the spear-thrower was the U. S. Government. The Federal Trade Commission last week charged that Goodyear, world’s biggest tiremaker. has been enjoying an un holy relationship with Sears, Roebuck & Co., biggest U. S. mail-order house. Said the Commission: “Respondent [Goodyear] has since May, 1926, discriminated in price . . . between the different purchasers of its products by giving and allowing Sears, Roebuck & Co. a lower price . . . than purchasers competitively engaged in said line of commerce, and also by giving and allowing Sears, Roebuck & Co. certain secret rebates or discounts … in the form of cash and valuable stock bonuses. “This discrimination in price has not been made . . . on account of differences in grade, quality, or quantity . . . nor . . . in the cost of selling or transportation . . . nor . . . in good faith to meet competition.”

To polish off its damnation of Goodyear, the Commision invoked the Claytonanti-trust act, charging that the alleged discrimination “tends to create a monopoly” in the making and selling of tires.

Goodyear’s President Paul Weeks Litchfield was not particularly alarmed by the Commission’s complaint. “The manufacture of special brand merchandise for large distributors is a common practice in most lines of manufacturing and merchandising,” he remarked. “However, this Goodyear-Sears contract has for several years been the subject of a great deal of publicity and the objective of an anti-mail-order campaign directed at our dealer organization. We welcome this opportunity to have the facts aired and settled once and for all. . . . When the case comes up for hearing we expect to prove that no law has been violated and that our stockholders, our dealers and thousands of employes directly engaged in the production of Sears’ tires have been greatly benefitted.”

Meantime as tiremakers labored with their code in Washington, Akron chuckled:If Harvey Firestone had not actually sicked the government on Goodyear, for once at least he would find no fault with Government policing of Business.