The Missing Conspirators

Under the lights in a South Bend, Ind. courtroom one night last week sat 17 respectable business men, numb with the same chill apprehension that narrows the eyes of every accused man when his trial jury announces it is ready with its verdict. Hulking in their midst was bluff, red-faced President William S. Knudsen of General Motors Corp., nearby the slim figure of G. M. C.'s millionaire Board Chairman Alfred P. Sloan Jr. In the defendants' sanctuary around them sat 15 others: President John J. Schumann Jr., of General Motors Acceptance Corp., three of his vice presidents, lesser G. M. C. officials.

At 8:30 Judge Walter C. Lindley took his seat on the bench and the jury of farmers and merchants stumbled into the box. The 17 sat ramrod-straight as the farmer-foreman handed up the verdict. The clerk began to read: General Motors Corporation, guilty; General Motors Sales Corporation, guilty; General Motors Acceptance Corporation, guilty; General Motors Acceptance Corporation of Indiana, guilty. He began the list of individual defendants: Alfred P. Sloan, William S. Knudsen, M. E. Coyle. . . . Over the faces of the defendants fell a dark shadow. The maximum penalty for the conspiracy as charged was a fine of $5,000 and a year in jail.

Down the list droned the clerk, paused at the last name and took a breath. Then, "Not guilty." Over Bill Knudsen's broad Danish face spread a grin. He turned and silently shook the hand of the man next to him. Then there was handshaking all around.

Thus ended the six-week trial of General Motors, accused of conspiring to restrain interstate commerce by forcing its dealers to specify that all the cars they sell on installments be financed through General Motors Acceptance Corp. The jury's strange verdict seemed to say that there had been a conspiracy without conspirators. But no seer was needed to guess at the jury's real meaning: that the men accused were no criminals, but the practice had better be stopped.

Next day Judge Lindley slapped a $5,000 fine on each of the four corporations, ordered them to pay the cost of prosecution, estimated at $500,000 to $1,000,000. He did so in spite of defense motions to throw out the peculiar verdict. Said he wryly:

"I observed in a recent opinion of the Supreme Court that one of the recent appointees of that court has expressly said that the court has been reconstructed and the fair implication, as I read it, is that precedents may be of little avail, and their lack no bar. I must confess that at the end of 17 years on the bench I find less certainty in the law today than at any time. . . . The question of law is one which it seems to me that a trial judge in the present conditions and the present environment . . . should not condemn."

Significance. When prosecution loomed, Ford and Chrysler accepted consent decrees, agreeing not to compel dealers to use their finance companies, provided that General Motors stood trial and lost. General Motors, carrying the ball for the big three, expects to appeal the case all the way to the Supreme Court. The final decision in G. M.'s case will determine whether the 370-odd independent U. S. finance companies can cut themselves in on the profitable installment business of the motor industry.

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