ALUMINUM: Judge Caffey Says It’s Legal

The Aluminum Co. of America is not an illegal monopoly. So last week said Federal Judge Francis Gordon Caffey, in the first third of his marathon decision on the longest court trial in U.S. history.

Bright-eyed, scrawny-necked, 72-year-old Judge Caffey had sat through one year and 18,331 pages of Government testimony to the effect that Alcoa was a trade-restrainer, should be broken up into several parts. He had sat through another 14 months and 22,377 pages of Alcoa defense. Then, while exhibits and interrogations brought the record to 58,000 pages, Judge Caffey took 5½ months off to study it and make up his mind.

Judge Caffey does not write his decisions, prefers to ad lib them from the bench. With an occasional glance at his foolscap notes, he spoke for five days in a row last week, had another four or five days to go. His high-pitched emphases and muttered diminuendos even included instructions to the stenographers: “period, paragraph . . . quote, parenthesis . . . unquote.” His whole audience was fascinated by his virtuoso command of the case. But only the Alcoa men were pleased.

“If I am right in my conclusions,” said he in a digression on the second day, “then there is no basis for sustaining the contention that there has been monopolization by Alcoa.” Systematically, he had divided the case into 36 sections, each of which must be ruled on before he can make the final decision: whether to break Alcoa up. Three branches of law are involved: tariff law, patent law, the Sherman Act. The Government’s charges were in twelve groups, for different branches of the industry: 1) bauxite; 2) water power; 3) alumina; 4) virgin aluminum, pig and ingot; 5) castings; 6) cooking utensils; 7) pistons; 8) extrusions and structural shapes; 9) foil; 10) miscellaneous fabricated articles; 11) sheet; 12) cables.

On each of these twelve groups, Judge Caffey had to rule whether Alcoa 1) possesses a monopoly, 2) conspired to obtain a monopoly, 3) was guilty of other misconduct. At this week’s beginning, Judge Caffey had decided Alcoa has no monopoly in any of the twelve fields.

On bauxite: “. . . testimony . . . completely fails to sustain the Government’s allegation.”

On water power: Federal Power Commission reports show Alcoa’s power facilities growing, but it controls only 360,000 kilowatt hours of an estimated 117 billion U.S. capacity—”an insignificant portion. . . . “

On alumina: Since 1903 anyone could use the Bayer process in producing alumina. “It is as free as air. . . .”

On virgin aluminum: Despite Alcoa’s admitted 100% control, the company has not monopolized the metal within the meaning of the Sherman Act. It competes with imported foreign metal.

And so on down the line.

When the Government started its suit, Alcoa had in fact no competition in the U.S. But defense needs and RFC loans have since put one competitor, Reynolds Metals, into the aluminum business, with three more—Olin Corp., Bohn Aluminum, Union Carbide & Carbon—on the point of joining the fray if Jesse Jones’s Defense Plant Corp. ever gets around to signing the papers. Nevertheless the Government will appeal Judge Caffey’s decision to the Supreme Court.

Since four of the Justices—Murphy, Reed, Jackson, Stone—were at one time or another on the Attorney General’s side of the aluminum case, they may disqualify themselves. It would then become the first anti-trust case in Supreme Court history to be heard by only five men.