At the sales executive conference of the A. E. I. C. held between September 30 and October 3, 1940, at Hot Springs, Va., Mr. Mueller presented a report entitled "Today's Fluorescent Lighting Situation" (exhibit 5). At this conference there was "a great deal of discussion of the problems presented to the utility companies by the rapid development of fluorescent lighting (exhibit 48). 2. Pursuant to the decisions made between the utilities and the Mazda lamp manufacturers at their various conferences, the Mazda lamp manufacturers have refrained from advertising that fluorescent could be used to save electricity and have attempted to prevent this fact from coming to the attention of the public

There are numerous examples:

On May 24, 1939, Mr. Sharp, of Buffalo, Niagara, wrote Mr. Harrison that utility men had complained to him concerning a display in the General Electric Building at the New York World's Fair. This display purportedly consisted of a 20-watt fluorescent lamp and a 20-watt incandescent lamp with a foot candle meter which showed how much more light was given by the fluorescent lamp than by the incandescent lamp. A sign accompanied the display which read to the effect, "See the difference between equal wattages of fluorescent and Mazda [incandescent] lighting" and the foot candle meters evidently showed "dramatic differences" in the quantity of light. Objecting to General Electric having this display on exhibit in their building at the World's Fair, Mr. Sharp stated:

"If this demonstration is as explained to me, I think it does violate the spirit of the understanding that our group had in Cleveland. As a matter of fact, I would think it violated the fundamental concept of the lamp department that advances in the lighting art should not be at the expense of wattage but should give the customer more for the same money. I hope you can find a way to change this exhibit, so that it does not give misleading impressions to the crowd who will see it" (exhibit 49).

Mr. Harrison replied to Mr. Sharp that it had not been intended that the exhibit should demonstrate the amount of electricity which could be saved by the use of fluorescent lamps, and that the exhibit was being withdrawn (exhibits 50 and 51).

On May 20, 1940, when the General Electric Supply Corporation published a calalog listing and picturing fixtures unequipped with shielding, the lamp division objected on the grounds that "it is almost exactly what the General Electric Co. has agreed not to do and it is what the central stations intend to combat as indicated by their formal declaration of policy" (exhibit 52). The Supply Corporation justified the form of its advertising on the grounds that it was necessitated by Hygrade Sylvania competition (exhibit 53), but the lamp division persisted in its objection to picturing fixtures not equipped with shielding and urged that if it were necessary to sell nonshielded fixtures the price of such fixtures should be indicated only by note on the catalog's price schedules to the effect that if the fixtures listed were ordered without shielding their price would be so much less (exhibit 54).

General Electric does not satisfy itself with merely not itself advertising nonshielded lamp fixtures but causes other companies, whose lighting sales policies it has a part in dictating, to refrain from selling nonshielded fixtures. Thus, when Graybar Electric Co. prepared some advertising copy containing illustrations of nonshielded fixtures, and submitted such copy to General Electric for approval, the lamp department informed Graybar that it was reducing "the number of fixtures to be illustrated from the original list of 27 to approximately 18." Some of these fixtures were ruled out due to the engineering department's disapproval of bare lamp equipment. As you know, bare tube fixtures do not fit in with the standards of lighting practice which we are promoting (exhibit 55). 3. At the conferences between General Electric and Westinghouse and the Utilities it was also decided that General Electric and Westinghouse would work to have all fluorescent lamps operate on high-power factor

On January 11, 1940, Mr. Ward Harrison, of the General Electric lamp division, wrote that "it is true that the lamp department has promised the utilities to feature high-power factor in advertising" (exhibit 56).

Subsequently at a meeting at Boca Raton, Fla., on January 18, 1940, officials of the lamp department and officials of certain utilities came to an understand

ing as to what should be the wording of the announcement with respect to power-factor correction which General Electric should make to the public (exhibit 57). As a result of this conference it was decided, and Messrs. Kewley and Harrison promised, that the statement would read as follows: "General Electric Mazda lamps are recommended for use only with equipment providing good power factor" (exhibit 58).

General Electric and Westinghouse have continuously in their advertisements stressed that fluorescent lamps should be used only with equipment giving highpower factor.

4. The members of the Lamp Committee of the E. E. I. and of the Lighting Sales Committee of the A. E. I. C. and officials of various utility companies have engaged in extensibe policing of the fluorescent advertising and promotional material of the Mazda manufacturers in order to make sure that they not deviate from the basis upon which it was agreed at the various conferences that fluorescent lighting should be promoted

On December 15, 1939, Mr. J. L. McEachin, commercial sales manager of the Minnesota Power & Light Co., Duluth, Minn., wrote to Mr. G. E. Nelson, manager of the northern division of the incandescent lamp department of General Electric, complaining about General Electric advertising in the Electrical Contracting Magazine for December 1939 (exhibit 59).

On December 18, 1939, Mr. J. E. Lynch, of the Minnesota Power & Light Co., wrote to Mr. R. H. Fite, of the Electrical Bond & Share Service, Inc., as follows: "On Friday last, we were favored with a visit from Mr. Ed Stryker, Cleveland, and Mr. George Nelson, Minneapolis, who endeavored to explain away why it is some departments of General Electric Co. can advertise untruthfully and mislead the public generally on this rather delicate subject and the lamp department has need only to send out such an individual as Mr. Stryker in the capacity of fire extinguisher and everything should be well. It has been necessary to advise them that future moves are theirs and that from now on our policy may be to go along with the lamp company which is endeavoring to handle such an important matter in the proper manner" (exhibit 60).

* * *

On January 8, 1940, Mr. R. H. Fite replied to Mr. Lynch and stated: "Apparently through some misunderstanding or lack of proper coordination between the respective divisions of the General Electric Co., the Schenectady Advertising Department [of General Electric] is still on the wrong track. agree with you that this matter is really serious *

*

*" (exhibit 61).

We Mr. Fite advised Mr. Lynch to continue to cooperate with General Electric in their territory. Otherwise, the lighting business of the Minnesota Power & Light Co. "might be adversely affected."

On January 3, 1940, Mr. Sharp wrote to Mr. A. L. Powell, supervising engineer, lamp department of General Electric, objecting to Mr. Powell's articles in Lightings and Lamp because Mr. Powell had stated that "there is a very definite trend toward direct lighting as an offset to the low total luminous output of fluorescent tubes" (exhibit 62).

On January 22, 1940, an official of the Carolina Power & Light Co., of Raleigh, N. C., wrote Mr. Cleaver, of the commercial engineering department of Westinghouse, a letter commenting on an advertisement of Hygrade that "fluorescent lighting for general illumination is here today." The letter inquires whether, "Your big company intends to do those things which Hygrade is scheduled to do." The letter further states:

"You, of course, realize that in many instances the wattage will be cut to one-third as fluorescent replaces incandescent installations. There is considerably more at stake this year than there was at the time the incandescent replaced the carbon [filament lamp]-so much more that we are beginning to wonder" (exhibit 63).

On July 17, 1940, a district manager of General Electric Supply Corporation, Mr. R. D. Glennie, and Mr. Booth and Mr. Sharp, of Buffalo, Niagara Electric, met and discussed the fluorescent situation. At this meeting Mr. Sharp complained about the increased sales of fluorescent lamps in such a way as to decrease the amount of electricity consumed. On July 18, 1940, in respect to this conference Mr. Glennie wrote Mr. Sharp that he believed that it was the sale of fluorescent lamps through contractors that was causing the trouble. Mr. Glennie proposed that if Mr. Sharp thought it a good idea they would have a meeting with the contractors at the end of August in order to guide their activities. He proposed that the General Electric Supply Corporation should go through its

records and get the names of the contractors who were pushing fluorescent lighting. He stated that it was to "our interest to work together because we have a reputation at stake, which we are jealously guarding, and we are endeavoring to operate at a profit. You, too, are endeavoring to keep your customers happy and you must protect your load. Therefore our problems are one and the same" (exhibit 64).

5. The utilities assist General Electric and Westinghouse in obtaining and maintaining control over the manufacture and sale of fluorescent lamps and equipment for their operation by selling and promoting Mazda fluorescent lamps almost exclusively and by supporting the efforts of General Electric and Westinghouse to obtain and maintain control over the manufacture and sale of fluorescent lamps and equipment for their operations

Hygrade has been very active in the fluorescent lighting industry from its inception, energetically promoting the use of fluorescent lighting, and obtaining a strong position for itself in the electric lamp industry through developing a large business in the manufacture and sale of fluorescent lamps. The Mazda lamp companies have sought to keep Hygrade down in the fluorescent lamp field because they fear that Hygrade's development in this field would weaken their control of the electric lamp industry. The utilities have worried over Hygrade's aggressive methods in promoting the use of fluorescent lighting, largely because the utilities oppose any sponsorship of fluorescent lighting which does not limit fluorescent lighting to those fields where wattages will not be reduced, but also because of their fear that it would be more difficult to control the activities of a non-Mazda company.

The utility companies have persisted in attempts to put pressure on Hygrade in order to cause Hygrade to desist from its aggressive sales method. Thus, on April 6, 1940, Mr. Bremicker, a member of the lighting sales committee of the E. E. I. and manager of the lighting sales department of the West Pennsylvania Power Co., wrote Hygrade, stating that his company did not wish to demonstrate a new model Hygrade fluorescent unit (exhibit 65). The reason for the refusal to demonstrate was stated as follows:

"An important consideration in the desirability of obtaining fluorescent equipment for demonstration purposes is the sales policy of the manufacturer of the equipment involved. It has been our policy, and we believe generally the policy of utilities throughout the country, to support and promote the sale of fluorescent equipment made by companies whose sales policies truthfully report the merits of their equipment and whose literature and advertising, and particularly that promotional material placed in the hands of their representatives, promotes the sale of fluorescent lighting in accordance with accepted fundamental lighting principles as embodied in the better light-better sight movement. It is our feeling that your sales policy and promotional material do not meet these requirements. We realize that you apparently have made a genuine effort to cooperate with utilities in the earlier stages of fluorescent lighting, particularly with respect to power factor correction, and we trust that you have a sincere desire to correct the objectionable features of your present operations. For this reason we are pointing out certain specific points which we consider objectionable and would greatly appreciate your reactions."

The specific points concern the advertisement of the statement that fluorescent lighting gives "several times more light," and the advertising of "bare" fluorescent lamp fixtures which employ no diffusing medium. The latter concludes:

"With the above facts in mind, we think you will understand why we are not interested in spending any money for Hygrade demonstration equipment until we are satisfied that your company intends to cooperate with us in selling fluorescent lighting properly designed and properly applied."

The character of the correspondence between members of the lighting sales committee of the E. E. I. concerning Hygrade's method of promoting fluorescent lighting and the attitude of the utilities toward Hygrade prompted Mr. Mueller, chairman of the lighting sales committee of the E. E. I. to send, on May 7, 1940, to the members of the committee a copy of a letter sent him on May 6, 1940, by Mr. C. E. Greenwood. Mr. Greenwood's letter reads:

"Some interesting correspondence has come across my desk on the subject of Hygrade fluorescent lighting units and I am prompted to call your attention to one important point which was brought out in Marshall Waterman's letter to you under date of April 24. He states "Obviously any preview of this kind cannot be an official matter either with respect to E. E. I. or even with respect to the

companies involved, but must remain purely a matter of personal suggestions from lighting directors to the manufacturers.

"This becomes doubly important in view of the feeling at this time that exists between Hygrade and the R. L. M. group. Mr. Lowell and one of his company representatives spent over an hour with me recently and there is a definite resentment indicated in the way they feel they are treated as compared with the so-called Mazda group.

"As I have brought out on numerous occasions, no organizational committee, nor any member of it, has any right to discuss authoritatively the policies of E. E. I. I am offering the suggestion that in writing to Hygrade the members of your committee be certain that they identify themselves with affiliation in their own company and then in any antitrust investigation or other troubles we will not find letters being brought up that might involve the institute.

"I am advising you of the situation so that you may judge your procedure accordingly" (exhibit 66).

On May 29, 1940, Hygrade, through Mr. W. P. Lowell, of its commercial engineering department, invited the members of the lighting sales committee of the E. E. I. to a conference to be held on June 11, 1940, for the purpose of discussing Hygrade's sales, and promotional policies of fluorescent lighting (exhibit 67). It is not known whether or not this conference was held, or if the conference was held, whether or not Hygrade succeeded in persuading the utility men present to adopt a less unfavorable attitude toward Hygrade.

Referring to the activities of Hygrade in the fluorescent lighting industry in his report "Today's fluorescent lighting situation" (exhibit 5), presented at the sales executives' conference of the A. E. I. C. held between September 30 and October 3, 1940, at Hot Springs, Va., Mr. J. E. Mueller stated that

"Another consideration which has the necessary potential for developing into a major problem is the apparent realinement of forces that is taking place among the lamp bulb manufacturers.

The largest non-Mazda manufacturer (Hygrade) claims to have basic patents for the manufacture of fluorescent lamps, and does not recognize the patents held by the Mazda companies. This is at the present time in the process of being decided by the courts. This realinement of forces, together with the competitive situation which attends it, might lead to methods and activities which could disorganize the whole lighting market to the detriment of the public and he utilities who are standing on the sidelines.

"For example, apparently the non-Mazda company, with its fixture activities, is capturing a sizable portion of the market. This is claimed by them and admitted by the Mazda people. The non-Mazda concern has, of course, captured this share of the market by aggressive merchandising. This has meant a quick assembling of a direct sales force as well as the addition of large numbers of dealer and distributor salesmen. Expansion here has been so rapid that training has lagged their sales efforts, which has led to "gadget" rather than lighting selling, and the use of questionable sales methods, particularly in certain areas. Their management is aware of this situation, and is taking steps to correct it. However, here again there is a wide divergence between management and field operation. "There are some indications that, in an effort to combat this competition, the Mazda companies are suggesting similar methods to their distribution channels. So far, any rapid expansion of old-line jobber sales forces putting on large numbers of poorly trained fluirescent lighting salesmen for direct customer selling has been limited to isolated areas. However, if this practice grows to too great an extent, and sound training and promotional methods are allowed to lag sales efforts, this can lead to a serious situation which can upset the structure for industry cooperation.”

Because of Hygrade's treatment by the utilities, Mr. E. J. Poor, president of Hygrade, addressed a memorandum, dated December 13, 1940, to the Department of Justice in which he stated:

"Hygrade Sylvania Corporation for the past 2 years has been advertising nationally the fact that it is one of the foremost companies in the manufacture and sale of fluorescent lighting equipment and, in addition, through letters and contacts through salesmen, has brought this fact to the attention of all the large electric light and power companies. Hardly without exception, those companies know from attempts to interest and sell them Hygrade tungsten filament lamps during the past 10 years or more, that the quality of Hygrade products is at least equal to that of any other company and, in general, its prices are lower, representing a real saving to the purchaser.

84949-43-pt. 1-4

"In spite of these facts, the large lighting and power companies such as the Detroit Edison Co. of Detroit, Mich.; Standard Gas & Electric Co., of Chicago, Ill.; Commonwealth Edison Co. of Chicago, Ill.; and a great many others, have not placed orders for either tungsten filament or fluorescent lamps with Hygrade Sylvania Corporation but have, without exception, favored the so-called Mazda lamp manufacturer whose sales represent 80 percent of the total requirements in this field.

"Companies such as Boston Edison Co., of Boston, Mass.; Central Hudson Gas & Electric Corporation, of Poughkeepsie, N. Y.; New England Power Co., of Boston, Mass.; Consolidated Edison Co., of New York; and West Penn Power Co., of Pittsburgh, Pa., and a few others who have placed with Hygrade a very small percentage of the total light and power companies' lamp business, have been well pleased with the quality and service from Hygrade on incandescent lamps and have made a worthwhile saving through their purchases" (exhibit 68).

6. One of the principal subjects, in addition to those described in detail in this report, discussed at the meetings between the utilities and the Mazda manufacturers was the organization of manufacturers of fixtures and auxiliary equipment for fluorescent lamps into associations which would be subject to regulation by General Electric and Westinghouse and which would be used as a means of extending the control of General Electric and Westinghouse over the manufacture and sale of fluorescent lamps and which would, at the same time, be used as a means of promoting fluorescent lighting so that it would not be used as a means of decreasing consumption of electricity and would be used only with equipment providing high power factor.

Pursuant to the conferences between the utilities and the Mazda companies, two associations were promoted to organize the manufacturers of fluorescent lighting fixtures and manufacturers of fluorescent light equipment including ballasts and starting switches. One of these associations, the Fleur-O-Lier, consists of manufacturers of lighting fixtures for "commercial" installations and the other association, the Reflector Lamp Manufacturers Institute (commonly referred to as the R. L. M.), consists of manufacturers of fixtures for industrial installations. The two Mazda lamp manufacturers, or so it is given out to the industry, prepare specifications for fixtures, ballasts, and starting switches, and it is the essence of the Fleur-O-Lier and R. L. M. programs that manufacturers desirous of participating in either or both of the programs and of attaching the Fleur-O-Lier or R. L. M. labels to his fixtures, ballasts, or starting switches, must make his product according to, and have it certified as meeting the specifications applying to it. The E. T. L. tests the fixtures, ballasts, and starting switches to determine that they meet the specifications and awards the certifications. Although it is publicly announced that the specifications are prepared by the Mazda lamp manufacturers, the specifications are in fact submitted by the Mazda lamp manufacturers to the utilities for their approval and revision before the specifications are officially furnished to E. T. L.. The specifications are prepared in accordance with the interests of the utility companies, both in that they provide that fixtures and ballasts will be power factor corrected and in that they are designed to insure that fixtures complying with them will not be used to reduce electricity consumption. No specifications were issued for portable fixtures, such as desk lamps, which might be used to reduce electricity consumption. In the interests of General Electric and Westinghouse, the Fleur-O-Lier and R. L. M. programs are employed to secure to those companies a monopoly of fluorescent lamps and control over the manufacture and sale of ballasts and starting switches. For example, General Electric and Westinghouse require fixture manufacturers in the Fleur-O-Lier and R. L. M. associations to affix to their fixtures labels, which are so worded as to induce the use in such fixtures of fluorescent lamps manufacturered by General Electric and Westinghouse.

The Mazda lamp manufacturers and utilities have promoted the Fleur-O-Lier and R. L. M. associations in order to enable them to control the manufacture, sale and use of fluorescent lamps, ballasts, and starting switches and, therefore, they have sought to compel and cause all fixture, ballasts and starting switch manufacturers, except those whose competition they wished to eliminate, to participate and join the associations. To this end both the Mazda lamp manufacturers and the utility companies have supported, promoted, and fostered the manufacture, sale and use of Fleur-O-Lier certified and R. L. M. certified fixtures, ballasts, and starting switches and have discouraged, hindered, and suppressed the sale of such equipment not having Fleur-O-Lier or R. L. M. certification. The Mazda lamp manufacturers and the utilities' efforts to this end have