United States v. E. I. Du Pont De Nemours & Co.

Mr. Justice Brennan

delivered the opinion of the Court.

This is a direct appeal under § 2 of the Expediting Act1 from a judgment of the District Court for the Northern District of Illinois,2 dismissing the Government’s action brought in 1949 under § 15 of the Clayton Act.3 The complaint alleged a violation of § 7 of the Act4 resulting from the purchase by E. I. du Pont de Nemours and Company in 1917-1919 of a 23% stock interest in General Motors Corporation. This appeal is from the dismissal of the action as to du Pont, General Motors and the corporate holders of large amounts of du Pont stock, Chris-tiana Securities Corporation and Delaware Realty & Investment Company.5

The primary issue is whether du Pont’s commanding position as General Motors’ supplier of automotive *589 finishes and fabrics was achieved on competitive merit alone, or because its acquisition of the General Motors’ stock, and the consequent close intercompany relationship, led to the insulation of most of the General Motors’ market from free competition, with the resultant likelihood, at the time of suit, of the creation of a monopoly of a line of commerce.

The first paragraph of § 7, pertinent here, provides:

“That no corporation engaged in commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital of another corporation engaged also in commerce, where the effect of such acquisition may be to substantially lessen competition between the corporation whose stock is so acquired and the corporation making the acquisition, or to restrain such commerce in any section or community, or tend to create a monopoly of any line of commerce.” 6

Section 7 is designed to arrest in its incipiency not only the substantial lessening of competition from the acquisition by one corporation of the whole or any part of the stock of a competing corporation, but also to arrest in their incipiency restraints or monopolies in a relevant market which, as a reasonable probability, appear at the time of suit likely to result from the acquisition by one corporation of all or any part of the stock of any other corporation. The section is violated whether or not actual restraints or monopolies, or the substantial lessening of competition, have occurred or are intended. Acquisitions solely for investment are excepted, but only if, and so long as, the stock is not used by voting or otherwise to bring about, or in attempting to bring about, the substantial lessening of competition.

*590 We are met at the threshold with the argument that § 7, before its amendment in 1950, applied only to an acquisition of the stock of a competing corporation, and not to an acquisition by a supplier corporation of the stock of a customer corporation — in other words, that the statute applied only to horizontal and not to vertical acquisitions. This is the first case presenting the question in this Court. International Shoe Co. v. Federal Trade Comm’n, 280 U. S. 291, and Thatcher Mfg. Co. v. Federal Trade Comm’n, 272 U. S. 554, involved corporate acquisitions of stock of competitors.

During the 35 years before this action was brought, the Government did not invoke § 7 against vertical acquisitions. The Federal Trade Commission has said that the section did not apply to vertical acquisitions. See F. T. C., Report on Corporate Mergers and Acquisitions, 168 (1955), H. R. Doc. No. 169, 84th Cong., 1st Sess. Also, the House Committee considering the 1950 revision of § 7 stated that “. . . it has been thought by some that this legislation [the 1914 Act] applies only to the so-called horizontal mergers. . . .” H. R. Rep. No. 1191, 81st Cong., 1st Sess. 11. The House Report adds, however, that the 1950 amendment was purposed “. . . to make it clear that the bill applies to all types of mergers and acquisitions, vertical and conglomerate as well as horizontal . . . (Emphasis added.)

This Court has the duty to reconcile administrative interpretations with the broad antitrust policies laid down by Congress. Cf. Automatic Canteen Co. v. Federal Trade Comm’n, 346 U. S. 61, 74. The failure of the Commission to act is not a binding administrative interpretation that Congress did not intend vertical acquisitions to come within the purview of the Act. Accord, Baltimore & Ohio R. Co. v. Jackson, 353 U. S. 325, 331.

The first paragraph of § 7, written in the disjunctive, plainly is framed to reach not only the corporate acquisi *591 tion of stock of a competing corporation, where the effect may be substantially to lessen competition between them, but also the corporate acquisition of stock of any corporation, competitor or not, where the effect may be either (1) to restrain commerce in any section or community, or (2) tend to create a monopoly of any line of commerce. The amended complaint does not allege that the effect of du Pont’s acquisition may be to restrain commerce in any section or community but alleges that the effect was “. . . to tend to create a monopoly in particular lines of commerce . . . .”

Section 7 contains a second paragraph dealing with a holding company’s acquisition of stock in two or more corporations.7 Much of the legislative history of the section deals with the alleged holding company evil.8 This history does not aid in interpretation because our concern here is with the first paragraph of the section. There is, however, pertinent legislative history which does aid and support our construction.

Senator Chilton, one of the Senate managers of the bill, explained that the House conferees insisted that to prohibit just the acquisitions where the effect was “substantially” to lessen competition would not accomplish the designed aim of the statute, because “a corporation might acquire the stock of another corporation, *592 and there would be no lessening of competition, but the tendency might be to create monopoly or to restrain trade or commerce.” “Therefore,” said Senator Chil-ton, “there was added . . . the following: ‘Or to restrain such commerce in any section or community or tend to create a monopoly of any line of commerce.' ” 9 This construction of the section, as embracing three separate and distinct effects of a stock acquisition, has also been recognized by a number of federal courts.10

We hold that any acquisition by one corporation of all or any part of the stock of another corporation, competitor or not, is within the reach of the section whenever the reasonable likelihood appears that the acquisition will result in a restraint of commerce or in the creation of a monopoly of any line of commerce. Thus, although du Pont and General Motors are not competitors, a violation of the section has occurred if, as a result of the acquisition, there was at the time of suit a reasonable likelihood of a monopoly of any line of commerce. Judge Maris correctly stated in Transamerica Corp. v. Board of Governors, 206 F. 2d 163, 169:

“A monopoly involves the power to . . . exclude competition when the monopolist desires to do so. Obviously, under Section 7 it was not necessary . . . to find that . . . [the defendant] has actually achieved monopoly power but merely that the stock acquisitions under attack have brought it measurably closer to that end. For it is the purpose of the *593 Clayton Act to nip monopoly in the bud. Since by definition monopoly involves the power to eliminate competition a lessening of competition is clearly relevant in the determination of the existence of a tendency to monopolize. Accordingly in order to determine the existence of a tendency to monopoly in . . : any . . . line of business the area or areas of existing effective competition in which monopoly power might be exercised must first be determined. ...”

Appellees argue that there exists no basis for a finding of a probable restraint or monopoly within the meaning of § 7 because the total General Motors market for finishes and fabrics constituted only a negligible percentage of the total market for these materials for all uses, including automotive uses. It is stated in the General Motors brief that in 1947 du Pont's finish sales to General Motors constituted 3.5% of all sales of finishes to industrial users, and that its fabrics sales to General Motors comprised 1.6% of the total market for the type of fabric used by the automobile industry.

Determination of the relevant market is a necessary predicate to a finding of a violation of the Clayton Act because the threatened monopoly must be one which will substantially lessen competition “within the area of effective competition.” 11 Substantiality can be determined only in terms of the market affected. The record shows that automotive finishes and fabrics have sufficient peculiar characteristics and uses to constitute them products sufficiently distinct from all other finishes *594 and fabrics 12 to make them a “line of commerce” within the meaning of the Clayton Act. Cf. Van Camp & Sons Co. v. American Can Co., 278 U. S. 245.13 Thus, the *595 bounds of the relevant market for the purposes of this case are not coextensive with the total market for finishes and fabrics, but are coextensive with the automobile industry, the relevant market for automotive finishes and fabrics.14

The market affected must be substantial. Standard Fashion Co. v. Magrane-Houston Co., 258 U. S. 346, 357. Moreover, in order to establish a violation of § 7 the Government must prove a likelihood that competition may be “foreclosed in a substantial share of . . . [that market] .”15 Both requirements are satisfied in this case. The substantiality of a relevant market comprising the automobile industry is undisputed. The substantiality of General Motors’ share of that market is fully established in the evidence.

General Motors is the colossus of the giant automobile industry. It accounts annually for upwards of two-fifths of the total sales of automotive vehicles in the Nation.16 *596 In 1955 General Motors ranked first in sales and second in assets among all United States industrial corporations17 and became the first corporation to earn over a billion dollars in annual net income.18 In 1947 General Motors’ total purchases of all products from du Pont were $26,628,274, of which $18,938,229 (71%) represented purchases from du Pont’s Finishes Division. Of the latter amount purchases of “Duco” 19 and the thinner used to apply “Duco” totaled $12,224,798 (65%), and “Dulux” 20 purchases totaled $3,179,225. Purchases by General Motors of du Pont fabrics in 1948 amounted to $3,700,000, making it the largest account of du Pont’s Fabrics Division. Expressed in percentages, du Pont supplied 67% of General Motors’ requirements for finishes in 1946 and 68% in 1947.21 In fabrics du Pont supplied 52.3% of requirements in 1946, and 38.5% in 1947.22 Because General Motors accounts for almost one-half of the automobile industry’s annual sales, its requirements for automotive finishes and fabrics must represent approximately one-half of the relevant market for these materials. Because the record clearly shows that quantitatively and percentagewise du Pont supplies the largest part of General Motors’ requirements, we must conclude that du Pont has a substantial share of the relevant market.

The appellees argue that the Government could not maintain this action in 1949 because § 7 is applicable only to the acquisition of stock and not to the holding *597 or subsequent use of the stock. This argument misconceives the objective toward which § 7 is directed. The Clayton Act was intended to supplement the Sherman Act.23 Its aim was primarily to arrest apprehended consequences of intercorporate relationships before those relationships could work their evil, which may be at or any time after the acquisition, depending upon the circumstances of the particular case. The Senate declared the objective of the Clayton Act to be as follows:

“. . . Broadly stated, the bill, in its treatment of unlawful restraints and monopolies, seeks to prohibit and make unlawful certain trade practices which, as a rule, singly and in themselves, are not covered by the Act of July 2, 1890 [the Sherman Act], or other existing antitrust acts, and thus, by making these practices illegal, to arrest the creation of trusts, conspiracies, and monopolies in their incipiency and before consummation. . . .” S. Rep. No. 698, 63d Cong., 2d Sess. 1. (Emphasis added.)

“Incipiency” in this context denotes not the time the stock was acquired, but any time when the acquisition threatens to ripen into a prohibited effect. See Transamerica Corp. v. Board of Governors, 206 F. 2d 163, 166. To accomplish the congressional aim, the Government may proceed at any time that an acquisition may be said with reasonable probability to contain a threat that it may lead to a restraint of commerce or tend to create a monopoly of a line of commerce.24 Even when the purchase is solely for investment, the plain language of § 7 contemplates an action at any time the stock is used to *598 bring about, or in attempting to bring about, the substantial lessening of competition.25

Prior cases under § 7 were brought at or near the time of acquisition. See, e. g., International Shoe Co. v. Federal Trade Comm’n, 280 U. S. 291; V. Vivaudou, Inc. v. Federal Trade Comm’n, 54 F. 2d 273; Federal Trade Comm’n v. Thatcher Mfg. Co., 5 F. 2d 615, rev’d in part on another ground, 272 U. S. 554; United States v. Republic Steel Corp., 11 F. Supp. 117; In re Vanadium-Alloys Steel Co., 18 F. T. C. 194. None of these cases holds, or even suggests, that the Government is foreclosed from bringing the action at any time when a threat of the prohibited effects is evident.

Related to this argument is the District Court’s conclusion that 30 years of nonrestraint negated “any reasonable probability of such a restraint” at the time of the suit.26 While it is, of course, true that proof of a mere possibility of a prohibited restraint or tendency to monopoly will not establish the statutory requirement that the effect of an acquisition “may be” such restraint or tendency,27 the basic facts found by the District Court demonstrate the error of its conclusion.28

The du Pont Company’s commanding position as a General Motors supplier was not achieved until shortly *599 after its purchase of a sizable block of General Motors stock in 1917.29 At that time its production for the automobile industry and its sales to General Motors were relatively insignificant. General Motors then produced only about 11% of the total automobile production and its requirements, while relatively substantial, were far short of the proportions they assumed as it forged ahead to its present place in the industry.

At least 10 years before the stock acquisition, the du Pont Company, for over a century the manufacturer of military and commercial explosives, had decided to expand its business into other fields. It foresaw the loss of its market for explosives after the United States Army and Navy decided in 1908 to construct and operate their own plants. Nitrocellulose, a nitrated cotton, was the principal raw material used in du Pont’s manufacture of smokeless powder. A search for outlets for this raw material uncovered requirements in the manufacture of lacquers, celluloid, artificial leather and artificial silk. The first step taken was the du Pont purchase in 1910 of the Fabrikoid Company, then the largest manufacturer of artificial leather, reconstituted as the du Pont Fabrikoid Company in 1913.

The expansion program was barely started, however, when World War I intervened. The du Pont Company suddenly found itself engulfed with orders for military explosives from foreign nations later to be allies of the United States in the war, and it had to increase its capacity and plant facilities from 700,000 to 37,000,000 pounds per month at a cost exceeding $200,000,000. Profits accumulated and ultimately amounted to $232,-000,000. The need to find postwar uses for its expanded facilities and organization now being greater than ever, *600 du Pont continued its expansion program during the war years, setting aside $90,000,000 for the purpose. In September 1915, du Pont bought the Arlington Works, one of the Nation’s two largest celluloid companies. In June 1916, the Fairfield Rubber Company, producers of rubber-coated fabrics for automobile and carriage tops, was taken over by du Pont Fabrikoid. In March 1917, purchase was made of Harrison Brothers and Company, manufacturers of paint, varnish, acids and certain inorganic chemicals used in paint manufacture. Shortly afterwards, Harrison absorbed Beckton Chemical Company, a color manufacturer, and, also in 1917, the Bridgeport Wood Finishing Company, a varnish manufacturer.

Thus, before the first block of General Motors stock was acquired, du Pont was seeking markets not only for its nitrocellulose, but also for the artificial leather, celluloid, rubber-coated goods, and paints and varnishes in demand by automobile companies. In that connection, the trial court expressly found that . .• reports and other documents written at or near the time of the investment show that du Pont’s representatives were well aware that General Motors was a large consumer of products of the kind offered by du Pont,” and that John J. Raskob, du Pont’s treasurer and the principal promoter of the investment, “for one, thought that du Pont would ultimately get all that business . . . .”30

The Company’s interest in buying into General Motors was stimulated by Raskob and Pierre S. du Pont, then du Pont’s president, who acquired personal holdings of General Motors stock in 1914. General Motors was organized six years earlier by William C. Durant to acquire previously independent automobile manufacturing companies — Buick, Cadillac, Oakland and Oldsmobile. ' Durant later brought in Chevrolet, organized by *601 him when he was temporarily out of power, during 1910-1915, and a bankers’ group controlled General Motors. In 1915, when Durant and the bankers deadlocked on the choice of a Board of Directors, they resolved the deadlock by an agreement under which Pierre S. du Pont was named Chairman of the General Motors Board, and Pierre S. du Pont, Raskob and two nominees of Mr. du Pont were named neutral directors. By 1916, Durant settled his differences with the bankers and resumed the presidency and his controlling position in General Motors. He prevailed upon Pierre S. du Pont and Raskob to continue their interest in General Motors’ affairs, which both did as members of the Finance Committee, working closely with Durant in matters of finances and operations and plans for future expansion. Durant persistently urged both men and the “Wilmington people, as he called it,” 31 to buy more stock in General Motors.

Finally, Raskob broached to Pierre S. du Pont the proposal that part of the fund earmarked for du Pont expansion be used in the purchase of General Motors stock. At this time about $50,000,000 of the $90,000,000 fund was still in hand. Raskob foresaw the success of the automobile industry and the opportunity for great profit in a substantial purchase of General Motors stock. On December 19, 1917, Raskob submitted a Treasurer’s Report to the du Pont Finance Committee recommending a purchase of General Motors stock in the amount of $25,000,000. That report makes clear that more than just a profitable investment was contemplated. A major consideration was that an expanding General Motors would provide a substantial market needed by the burgeoning du Pont organization. Raskob’s summary of reasons in support of the purchase includes this state *602 ment: “Our interest in the General Motors Company will undoubtedly secure for us the entire Fabrikoid, Pyralin [celluloid], paint and varnish business of those companies, which is a substantial factor.” (Emphasis added.)32

This thought, that the purchase would result in du Pont’s obtaining a new and substantial market, was echoed in the Company’s 1917 and 1918 annual reports to stockholders. In the 1917 report appears: “Though this is a new line of activity, it is one of great promise and one that seems to be well suited to the character of our organization. The motor companies are very large consumers of our Fabrikoid and Pyralin as well as paints and varnishes.” (Emphasis added.) The 1918 report says: “The consumption of paints, varnishes and fabrikoid in the manufacture of automobiles gives another common interest.”

This background of the acquisition, particularly the plain implications of the contemporaneous documents, destroys any basis for a conclusion that the purchase was made “solely for investment.” Moreover, immediately after the acquisition, du Pont’s influence growing out of it was brought to bear within General Motors to achieve primacy for du Pont as General Motors’ supplier of automotive fabrics and finishes.

Two years were to pass before du Pont’s total purchases of General Motors stock brought its percentage to 23% of the outstanding stock and its aggregate outlay to $49,000,000. During that period, du Pont and Durant worked under an arrangement giving du Pont primary responsibility for finances and Durant the responsibility for operations. But J. A. Haskell, du Pont’s former sales manager and vice-president, became the General Motors vice-president in charge of the operations committee. The trial judge said that Haskell “. . . was willing to under *603 take the responsibility of keeping du Pont informed of General Motors affairs during Durant’s regime . . . 33

Haskell frankly and openly set about gaining the maximum share of the General Motors market for du Pont. In a contemporaneous 1918 document, he reveals his intention to “pave the way for perhaps a more general adoption of our material,” and that he was thinking “how best to get cooperation [from the several General Motors Divisions] whereby makers of such of the low priced cars as it would seem possible and wise to get transferred will be put in the frame of mind necessary for its adoption [du Pont’s artificial leather].”

Haskell set up lines of communication within General Motors to be in a position to know at all times what du Pont products and what products of du Pont competitors were being used. It is not pure imagination to suppose that such surveillance from that source made an impressive impact upon purchasing officials. It would be understandably difficult for them not to interpret it as meaning that a preference was to be given to du Pont products. Haskell also actively pushed the program to substitute Fabrikoid artificial leathers for genuine leather and sponsored use of du Pont’s Pyralin sheeting through a liaison arrangement set up between himself and the du Pont sales organization.

Thus sprung from the barrier, du Pont quickly swept into a commanding lead over its competitors, who were never afterwards in serious contention. Indeed, General Motors’ then principal paint supplier, Flint Varnish and Chemical Works, early in 1918 saw the handwriting on the wall. The Flint president came to Durant asking to be bought out, telling Durant, as the trial judge found, that he “knew du Pont had bought a substantial interest in General Motors and was interested in the paint industry; that . . . [he] felt he would lose a valuable *604 customer, General Motors.” 34 The du Pont Company-bought the Flint Works and later dissolved it.

In less than four years, by August 1921, Lammot du Pont, then a du Pont vice-president and later Chairman of the Board of General Motors, in response to a query from Pierre S. du Pont, then Chairman of the Board of both du Pont and General Motors, “whether General Motors was taking its entire requirements of du Pont products from du Pont,” was able to reply that four of General Motors’ eight operating divisions bought from du Pont their entire requirements of paints and varnishes, five their entire requirements of Fabrikoid, four their entire requirements of rubber cloth, and seven their entire requirements of Pyralin and celluloid. Lammot du Pont quoted du Pont’s sales department as feeling that “the condition is improving and that eventually satisfactory conditions will be established in every branch, but they wouldn’t mind seeing things going a little faster.” Pierre S. du Pont responded that “with the change in management at Cadillac, Oakland and Olds [Cadillac was taking very little paints and varnishes, and Oakland but 50%; Olds was taking only part of its requirements for fabrikoid], I believe that you should be able to sell substantially all of the paint, varnish and fabrikoid products needed.” He also suggested that “a drive should be made for the Fisher Body business. Is there any reason why they have not dealt with us?”

Fisher Body was stubbornly resistant to du Pont sales pressure. General Motors, in 1920, during Durant’s time, acquired 60% stock control of Fisher Body Company. However, a voting trust was established giving the Fisher brothers broad powers of management. They insisted on running their own show and for years withstood efforts of high-ranking du Pont and General Motors executives to *605 get them to switch to du Pont from their accustomed sources of supply. Even after General Motors obtained 100% stock control in 1926, the Fisher brothers retained sufficient power to hold out. By 1947 and 1948, however, Fisher resistance had collapsed, and the proportions of its requirements supplied by du Pont compared favorably with the purchases by other General Motors Divisions.

In 1926, the du Pont officials felt that too much General Motors business was going to its competitors. When Pierre S. du Pont and Raskob expressed surprise, Lam-mot du Pont gave them a breakdown, by dollar amounts, of the purchases made from du Pont’s competitors. This breakdown showed, however, that only Fisher Body of the General Motors divisions was obtaining any substantial proportion of its requirements from du Pont’s competitors.

Competitors did obtain higher percentages of the General Motors business in later years, although never high enough at any time substantially to affect the dollar amount of du Pont’s sales. Indeed, it appears likely that General Motors probably turned to outside sources of supply at least in part because its requirements outstripped du Pont’s production, when General Motors’ proportion of total automobile sales grew greater and the company took its place as the sales leader of the automobile industry. For example, an undisputed Government exhibit shows that General Motors took 93% of du Pont’s automobile Duco production in 1941 and 83% in 1947.

The fact that sticks out in this voluminous record is that the bulk of du Pont’s production has always supplied the largest part of the requirements of the one customer in the automobile industry connected to du Pont by a stock interest. The inference is overwhelming that du Pont’s commanding position was promoted by its stock interest and was not gained solely on competitive merit.

*606 We agree with the trial court that considerations of price, quality and service were not overlooked by either du Pont or General Motors. Pride in its products and its high financial stake in General Motors’ success would naturally lead du Pont to try to supply the best. But the wisdom of this business judgment cannot obscure the fact, plainly revealed by the record, that du Pont purposely employed its stock to pry open the General Motors market to entrench itself as the primary supplier of General Motors’ requirements for automotive finishes and fabrics.35

*607 Similarly, the fact that all concerned in high executive posts in both companies acted honorably and fairly, each in the honest conviction that his actions were in the best interests of his own company and without any design to overreach anyone, including du Pont’s competitors, does not defeat the Government’s right to relief. It is not requisite to the proof of a violation of § 7 to show that restraint or monopoly was intended.

The statutory policy of fostering free competition is obviously furthered when no supplier has an advantage over his competitors from an acquisition of his customer’s stock likely to have the effects condemned by the statute. We repeat, that the test of a violation of § 7 is whether, at the time of suit, there is a reasonable probability that the acquisition is likely to result in the condemned restraints. The conclusion upon this record is inescapable that such likelihood was proved as to this acquisition. The fire that was kindled in 1917 continues to smolder. It burned briskly to forge the ties that bind the General Motors market to du Pont, and if it has quieted down, it remains hot, and, from past performance, is likely at any time to blaze and make the fusion complete.36

The judgment must therefore be reversed and the cause remanded to the District Court for a determination, after further hearing, of the equitable relief necessary and appropriate in the public interest to eliminate the effects of the acquisition offensive to the statute. The District Courts, in the framing of equitable decrees, are clothed *608 “with large discretion to model their judgments to fit the exigencies of the particular case.” International Salt Co. v. United States, 332 U. S. 392, 400-401.

The motion of the appellees Christiana Securities Company and Delaware Realty and Investment Company for dismissal of the appeal as to them is denied. It seems appropriate that they be retained as parties pending determination by the District Court of the relief to be granted.

It is so ordered.

Mr. Justice Clark, Mr. Justice Harlan and Mr. Justice Whittaker took no part in the consideration or decision of this case.

32 Stat. 823, as amended, 15 U. S. C. § 29. The Court noted probable jurisdiction. 350 U. S. 815.

126 F. Supp. 235.

38 Stat. 736, 15 ü. S. C. (1946 ed.) § 25.

This action is governed by the Clayton Act as it was before the 1950 amendments, which by their terms are inapplicable to acquisitions prior to 1950. 64 Stat. 1125, 15 U. S. C. ■§ 18.

The amended complaint also alleged violation of §§ 1 and 2 of the Sherman Act. 26 Stat. 209, as amended, 50 Stat. 693, 15 U. S. C. §§ 1, 2. In view of our determination of the case, we are not deciding the Government’s appeal from the dismissal of the action under the Sherman Act.

38 Stat. 731, 15 U. S. C. (1946 ed.) § 18.

This paragraph provides:

“No corporation shall acquire, directly or indirectly, the whole or any part of the stock or other share capital of two or more corporations engaged in commerce where the effect of such acquisition, or the use of such stock by the voting or granting of proxies or otherwise, may be to substantially lessen competition between such corporations, or any of them, whose stock or other share capital is so acquired, or to restrain such commerce in any section or community, or tend to create a monopoly of any line of commerce.” 38 Stat. 731, 15 U. S. C. (1946 ed.) § 18.

See, e. g., S. Rep. No. 698, 63d Cong., 2d Sess. 13; H. R. Rep. No. 627, 63d Cong., 2d Sess. 17.

51 Cong. Rec. 16002.

Aluminum Co. of America v. Federal Trade Comm’n, 284 F. 401; Ronald Fabrics Co. v. Verney Brunswick Mills, Inc., CCH Trade Cases ¶ 57,514 (D. C. S. D. N. Y. 1946); United States v. New England Fish Exchange, 258 F. 732; cf. Transamerica Corp. v. Board of Governors, 206 F. 2d 163; Sidney Morris & Co. v. National Assn, of Stationers, 40 F. 2d 620, 625.

Standard Oil Co. of California v. United States, 337 U. S. 293, 299, n. 5. Section 3 of the Act, with which the Court was concerned in Standard Oil, makes unlawful certain agreements . where the effect . . . may be to substantially lessen competition or tend to create a monopoly in any line of commerce." 38 Stat. 731, 15 U. S. C. (1946 ed.) § 14. (Emphasis added.)

For example, the following is said as to finishes in the du Pont brief:

“The largest single finish item which du Pont sells to General Motors is a low-viscosity nitrocellulose lacquer, discovered and patented by du Pont and for which its trademark is ‘Duco’. . . .

“The invention and development of ‘Duco’ represented a truly significant advance in the art of paint making and in the production of automobiles; without ‘Duco’ mass production of automobiles would not have been possible.

“By the early 1920’s the need for better finishing materials for automobiles had become urgent .... The varnish method then used in finishing automobiles was described in detail at the trial by automobile pioneers .... Finishing an automobile with varnish required an intolerably long time — up to 3 or 4 weeks — to apply the numerous coats needed. When the finish was complete, its longest life expectancy was less than a year, and often it began to peel off before the car was delivered. . . .”

Du Pont’s Director of Sales since 1944, Nickowitz, testified as to fabrics sold to automobile manufacturers as follows:

“Q. Now, over the years, isn’t it true that speaking generally du Pont has followed the policy in selling its fabrics to the automobile field of undercutting its competitors in price? You don’t try to sell it on a lower price than that quoted by any other competitor, do you?

“A. Well, we don’t know. We go in and we bid based on our costs. Now, in the automotive industry, we have a different situation than you do in the furniture trade, for example, where you have an established price.

“You see, in the automobile industry, each manufacturer uses a different construction. They all have their own peculiar ideas of what they want about these fabrics. Some want dyed backs, and some want different finishes, so you don’t have any standard prices in the automobile industry.” (Emphasis added.)

And see extended discussions in the opinion of the trial court, as to finishes, 126 F. Supp., at 288-292, as to fabrics, id., at 296-300.

“The phrase [‘in any line of commerce’] is comprehensive and means that if the forbidden effect or tendency is produced in one *595 out of all the various lines of commerce, the words 'in any line of commerce’ literally are satisfied.” 278 U. S., at 253.

The General Motors brief states:

“If the market for these products were solely or mainly the General Motors Corporation, or the automobile industry as a whole, General Motors’ volume and present share of the automobile industry might constitute a market large enough for the Government to rely on.”

Standard Oil Co. of California v. United States, 337 U. S. 293, at 314.

Moody’s Industrials lists General Motors’ proportion of the industry:

Percent Percent

1938 ... 42+ 1947 ... 38.5

1939 ... 42+ 1948 ... 38.8

1940 ... 45.6 1949 ... 42.7

1941 ... 45.3 1950 ... 45.6

1942 . W. W. II 1951 ... 41.8

1943 .W.W.II 1952 ... 40.3

1944 . W.W.II 1953 ... 44.7

1945 . W.W.II 1954 ... 49.9

1946 . 36.3 1955 ... 48.8

Fortune Directory of the 500 Largest U. S. Industrial Corporations, July 1956, p. 2.

N. Y. Times, Feb. 3,1956, p. 1, col. 3.

A finish developed specially by du Pont and General Motors for use as an automotive finish.

A synthetic enamel developed by du Pont which is used on refrigerators, also manufactured by General Motors.

126 F. Supp., at 295.

Id., at 300-301.

Standard Fashion Co. v. Magrane-Houston Co., 258 U. S. 346.

Cf. Corn Products Refining Co. v. Federal Trade Comm’n, 324 U. S. 726, 738.

Section 7 provides, in pertinent part:

“This section shall not apply to corporations purchasing such stock solely for investment and not using the same by voting or otherwise to bring about, or in attempting to bring about, the substantial lessening of competition. . . .” 38 Stat. 731, 15 U. S. C. (1946 ed.) §18.

126 F. Supp., at 335.

Standard Fashion Co. v. Magrane-Houston Co., 258 U. S. 346, at 356-357.

There is no significant dispute as to the basic facts pertinent to the decision. We are thus not confronted here with the provision of Fed. Rules Civ. Proc., 52 (a), that findings of fact shall not be set aside unless clearly erroneous.

Before 1917, du Pont supplied General Motors with coated fabrics. 126 F. Supp., at 297.

126 F. Supp., at 243.

126 F. Supp., at 241.

126 F. Supp., at 241.

126 F. Supp., at 245.

126 F. Supp., at 267.

The du Pont policy is well epitomized in a 1926 letter written by a former du Pont employee, J. L. Pratt, when a General Motors vice-president and member of the Executive Committee, to the general manager of a General Motors Division:

“I am glad to- know that your manufacturing, chemical and purchasing divisions feel they would be in better hands possibly by dealing with duPont than with local companies. From a business standpoint no doubt your organization would be influenced to give the business, under equal conditions, to the local concerns. However, I think when General Motors divisions recognize the sacrifice that the duPont Company made in 1920 and 1921, to keep General Motors Corporation from being put in a very bad light publicly — the duPont Company going to the extent of borrowing $35,000,000 on its notes when the company was entirely free of debt, in order to prevent a large amount of General Motors stock being thrown on the open market — they should give weight to this which in my mind more than over-balances consideration of local conditions. In other words, I feel that where conditions are equal from the standpoint of quality, service and price, the duPont Company should have the major share of General Motors divisions’ business on those items that the duPont Company can take on the basis of quality, service and price. If it is possible to use the product from more than one company I do not think it advisable to give any one company .all of the business, as I think it is desirable to always keep a competitive situation, otherwise any supplier is liable to grow slack in seeing that you have the best service and price possible.

“I have expressed my own personal sentiments in this letter to you in order that you might have my point of view, but I do not wish to influence your organization in any way that would be against *607 your own good judgment, keeping in mind that above all the prime consideration is to do the best thing for Delco-Light Company, and that considerations in regard to the duPont Company or other concerns are secondary, and I am sure this is your feeling.”

The potency of the influence of du- Pont’s 23% stock interest is greater today because of the diffusion of the remaining shares which, in 1947, were held by 436,510 stockholders; 92% owned no more than 100 shares each, and 60% owned no more than 25 shares each. 126 F. Supp., at 244.