Corporations: The Great Conspiracy

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At week's end Westinghouse's Chiles and Mauntel were led off in handcuffs to begin their sentences in a county jail in Norristown, Pa. The others, except for one who got permission to remain free another week to attend his daughter's engagement party, were to begin their sentences this week.

More Trouble. The companies' troubles will not end with the paying of fines, the completion of jail sentences, or the issuance of public relations disclaimers. The antitrust law gives defrauded customers the right to sue for as much as treble damages—and many customers are spoiling to get at the conspirators. More than a dozen cities, including New York and Chicago, are considering suits, and the National Institute of Municipal Law Officers may seek treble damages for many of the 171 cities who bought price-fixed and bid-rigged equipment. The Justice Department announced that it will bring suit within two months for damages on behalf of some 20 federal agencies that could amount to more than $250 million in claims.

All told, the suits against the companies involved in the conspiracies could total as much as $1.7 billion. To collect, their customers must first prove that they were charged more than they would have been without the conspiracy. But the Government charges that the manufacturers raised prices by mutual agreement, and the records show that the companies started cutting their bids as soon as the Government began investigating. TVA had paid $34 per kilowatt for its Widows Creek turbogenerator; because of foreign competition and other factors, the price for similar generators has since dropped to about $14 per kilowatt. So worried are the companies about their chances that some have already agreed to negotiate claims out of court: G.E. has offered to negotiate privately with anyone who feels that he was cheated.

The expectation of further trouble for the companies last week forced down G.E. and Westinghouse stock on the New York Stock Exchange. On one day, so many sell orders accumulated for G.E. stock that it took four hours before the price could be set and the stock opened. In turbulent trading during the day, 238,500 shares changed hands. By week's end G.E. stock had fallen more than $7 to about $62 and Westinghouse stock about $5 to $42.50.

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