Mercy of the Court

In the 69 years since Congress passed the Sherman Act. no reputable businessmen have served a jail term for antitrust violations and none after pleading nolo contendere (no contest)--until last month. Then Federal Judge Mell G. Underwood, 67, of Columbus, Ohio set a precedent. He ordered four officials of hand implement manufacturing companies to serve 90 days in the federal penitentiary at Milan, Mich. On the way to surrender, Defendant John T. Mains, 56, former mayor of Greenfield, Ohio, put a bullet through his head. Last week Judge Underwood rejected a plea to commute the remainder of the terms of the other three businessmen.

The case went into court last January when a Columbus federal grand jury indicted the four: Mains, sales vice president of the Union Fork & Hoe Co. of Columbus; William G. Rector and Robert R. Raymond, president and vice president of the True Temper Corp. of Cleveland; and F. Bliss Winn. president of the O. Ames Co. division of McDonough Co. of Parkersburg, W. Va. The indictment charged that at meetings held over the past five years they discussed setting identical prices for hundreds of implements, chiefly for gardening, such as rakes, shovels, picks, trowels, sidewalk scrapers and sod lifters. With other parties to the agreements (who got immunity to testify for the Government), the defendants controlled 60% to 80% of the nation's $50 million hand implement business.

At first, the defendants pleaded not guilty. Since, in case of conviction, the fact could be cited in any civil suits for triple damages, they changed their pleas to nolo contendere and threw themselves on the mercy of the court. While this is equivalent to a guilty plea, the fact could not be used in civil suits, thus lessening the risk that they would be filed. The defendants were also persuaded by the fact that 1) no one had ever received a prison sentence on a nolo contendere plea in antitrust cases, and 2) the Justice Department agreed to recommend only fines ($5,000 for the companies). But Judge

Underwood, who was appointed 23 years ago by F.D.R. and is known as a tough man on the bench, disregarded the trustbusters' recommendations. He fined the companies $20,000 and the individuals $5,000, plus the jail sentences, saying: "In cases of this character a fine is not a sufficient deterring factor." When defense attorneys protested that the jailing was unheard of. Underwood snapped: "There always has to be a first time."

This file is automatically generated by a robot program, so reader's discretion is required.