Expense and Ordeal

In Madison, Wis., last January, a jury chiefly comprised of farmers found 30 substantial members and 16 companies of the U. S. oil industry guilty of conspiring to raise and fix gasoline prices (TIME, Jan. 31). In the four months it took to arrive at that conclusion the Government prosecution and the industry's defense (there were 57 defense attorneys) together spent a total of about $3,000,000. In addition, conviction carried a maximum penalty of a $5,000 fine or a year in jail for each executive and a $5,000 fine for each company. With motions for a new trial still under consideration, sentence has not yet been imposed.

Scheduled for trial next September is Madison Case No. 2 in which the Government accused virtually the same officers and companies of having violated the Sherman Act in another way--by demanding uniform jobber contracts and permitting jobbers only a carefully defined profit. Last week, considering the amount of time and money they had already spent and might still have to spend, 14 of the 22 accused oil companies and eleven of their executives* decided to plead nolo contender e. That meant they agreed to pay maximum fines and court costs amounting to $400,000--which, considering the cost of the previous trial, was probably a shrewd economy. Said Attorney General Homer Cummings: "The offer may be regarded as a complete capitulation."

*The officers and their companies: Charles E. Arnott, Socony-Vacuum Oil Co.: A. G. Maguire, Wadhams Oil Co.; Amos Ball, Standard Oil Co. (Indiana); Harry D. Frueauff, Cities Service Co., Cities Service Oil Co., Empire Oil & Refining Co.; Edward Karstedt, formerly of Continental Oil Co.; G. C. Morris, Pure Oil Co.; Alexander Fraser, Shell Petroleum Corp.; J. W. Carnes, Sinclair Refining Co.; Robert W. McDowell, Mid-Continent Petroleum Corp.; Frank Phillips, Phillips Petroleum Co.; W. G. Skelly, Skelly Oil Co., Ohio Oil Co.

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