Mr. SMITH. That is correct. Mr. Cox. Could you tell us who those licensees are? Mr. SMITH. The Owens-Illinois Glass Co. and Hazel-Atlas Glass Co., both of which companies do a national business, have plants located in various parts of the country, and also make, as they advertise, everything in glassware and containers. Mr. Cox. The Owens-Illinois Co. is the largest manufacturer of glass containers? Mr. SMITH. Yes. Mr. Cox. And the Hazel-Atlas Co. is another very large manufacturer of glass containers? Mr. SMITH. Correct. Mr. Cox. But there is no license, even those licenses, which is absolutely unrestricted as to kind of ware which can be produced by the machines. Mr. SMITH. I don't get your question. Mr. Cox. Neither the Owens-Illinois Co. nor Hazel-Atlas is free under its license to manufacture heat-resisting ware, is that correct? Mr. SMITH. That is true. Mr. Cox. Or electric bulbs. Mr. SMITH. That is true. Mr. Cox. But those kinds of ware are, of course, not normally regarded as being in the glass container class. Mr. SMITH. Correct. Mr. Cox. And that kind of ware and several others are what is known in the trade as specialty ware. Mr. SMITH. Specialty ware, and they are not allowed to make specialty ware. Mr. Cox. And you have only one licensee who is allowed to make specialty ware, is that correct? Mr. SMITH. Practically. You are talking about bulbs or heatresisting ware. I am told by my partner that is not correct. Mr. SAFFORD. I think if you apply the term "specialty" to all noncontainers, then there are a great many more licensees than one. Mr. Cox. I wasn't applying the term in quite that wide way, although my question perhaps was open to that kind of interpretation. I have in mind the specific kinds of classifications that are named in the contract between yourselves and the Corning Glass Works: Signal and optical ware, electric bulbs, and certain kinds of heatresisting ware. As to those types of ware, you have only one licensee and that is Corning. Mr. SMITH. Right. Mr. SAFFORD. Except as rights have been released by the Corning Glass Works. Mr. Cox. Except as they have granted sublicenses. That is a contractual relationship between Corning and others? Mr. SAFFORD. No; they have permitted us to grant rights in those fields. Mr. Cox. And in some cases you grant those rights with the consent of Corning Glass Works? Mr. SAFFORD. That is right. Mr. Cox. To return to the glass container field, you said a moment ago you had only two licensees who are absolutely unrestricted as to types of ware they can produce. Are those two licensees also unrestricted as to the quantity of the different types of ware that can be produced on the licensed machine? Mr. SMITH. Correct. Mr. Cox. But they are the only two who are so unlimited? Mr. SMITH. Correct. Mr. Cox. All the other licensees are limited as to the amount or the number of glass containers that they can produce. Mr. SMITH. Oh, no. They are limited to types of wares, but not to amounts. Mr. Cox. Some of them are limited as to amounts. Mr. SMITH. Some of them are, that is right. Mr. Cox. Now taking for a moment milk bottles, you have before you the chart which we marked this morning.1 Mr. SMITH. Yes; and if you don't mind, Mr. Cox-excuse me, I was talking about another chart. May I ask you a question about another chart? In this pamphlet which you submitted to the committee this morning on page 27,2 graphically speaking it seems to me that 1 little bottle which is supposed to represent 500,000 gross doesn't tell what you really intend to have it tell, namely, that there ought to be 35 little bottles along the line as each concern produces 500,000 gross. And again when you have divided, on page 23,3 packers' ware, medicine and toilet, liquor ware, milk bottles and beer bottles, the statistics which you used, I doubt whether they were quite complete and give graphically the real picture. Am I permitted to submit for your approval revised charts, like on the packers' field, and the 35 bottles? I think it would be rather interesting because on page 23 it is quite a different story from what this particular chart tells. In other words, you have packers' ware, and the records of the Container Association and our own records show that 26 percent of the industry goes into what you might call packers' ware; 30 percent in medicine and toilet; 16 percent in liquor ware; 5 percent in milk bottles; 2 percent in fruit jars; and 9 percent in beers. Mr. Cox. We, I think, would be glad to have any other figures, so far as page 23 is concerned. Mr. SMITH. It just shows a little different picture, that is all. The CHAIRMAN. What does the chart on page 23 purport to show, Mr. Cox? Mr. Cox. It purports to show the importance of the different kinds of ware, the numerical importance of the different kinds of ware in the entire glass industry. That is, it shows, for example, what part of glass containers are represented by the milk bottles produced, what part are represented by the fruit jars. The figures from which the chart was prepared were figures taken from the Census of Manufactures, they were the best figures we could get at the time we prepared the chart, but we would be only too glad to have any other figures that are more accurate. Mr. SMITH. Thank you very much, because I am sure those are Mr. Cox. I would be glad to have this, which is Mr. Smith's revised figures for the chart on page 23, put into the record. (The amended chart referred to was marked "Exhibit No. 116" and is included in the appendix on p. 765.) The CHAIRMAN. It will be so inserted. This I take it is the same chart but the figures are changed. Mr. SMITH. The figures are quite different, and the same way with this chart on page 27.1 Graphically there should be 35 little bottles, 35 concerns, each making 500,000 gross. As a bottle represents 500,000 gross, there should be 35 bottles out in a line. Mr. Cox. I think that Mr. Smith's objection to the second chart is pictorial rather than statistical. Our chart was prepared to show the average production of each one of these companies here so that each one of the companies' position might be compared with each of the companies listed above. What Mr. Smith wishes to do it to put out here at the side little milk bottles or bottles which will indicate the lump production of all of the remaining 35 companies in its relation to the production of each of the other individual companies. While I have no objection to this and will be glad to have it go in the record, I want to make it clear that this chart of Mr. Smith's shows quite a different thing. We were attempting to contrast the position of the single small manufacturer in the field with the five big companies, and Mr. Smith's figure here is a lump figure for all of those 35, a pictorial representation of the 35. (The chart referred to was marked "Exhibit No. 117" and is included in the appendix on p. 766.) The CHAIRMAN. With respect to this other chart, did you develop the source of the percentages marked by Mr. Smith? Mr. Cox. Where did you get your figures, Mr. Smith? Mr. SMITH. From our own returns and the returns of the Glass Container Association. Mr. Cox. Published from time to time by the Glass Container Association? Mr. SMITH. Yes. Mr. Cox. That is the trade association for the glass container industry. Just so the record may be clear as to the relationship between yourself and Corning Glass Works, I want to make sure that I understand it is correct that before you can grant a license in one of the fields covered by the Corning contract it is necessary for you to get the consent of the Corning Glass Works. Mr. SMITH. In the formation agreement of the Hartford-Empire Co. and the agreement with the Corning Glass Works made at the same time, we sold outright to the Corning Glass Works certain rights and inventions, including the right to license in those particular fields and wares, so it isn't in our hands. We sold the exclusive rights. If the Corning Glass Works came to us and said, "Will you license A, B, C, and D?" we would probably be glad to do so, but we have no right to license. We sold them that exclusive right. That is theirs to do with as they see fit. We have divested ourselves of all further rights in those fields. 1 "Exhibit No. 112", appendix, p. 736 at p. 761. Mr. Cox. If I should wish to get the use of one of your machines to manufacture Pyrex then, I would have to go to the Corning Glass Works? Mr. SMITH. Correct. Mr. Cox. If I came to you, you would send me to them. Mr. Cox. Taking the chart again, which is what I started on a moment ago, you testified that your licensees are restricted as to the kinds of ware that they can produce. Will you tell us how many of the licensees shown on this chart are free today to produce milk bottles? Mr. SMITH. I think there are 10, although this chart may not show all of the various ramifications. Thatcher Manufacturing Co. have a subsidiary, the Olean Glass Co., which is also producing milk bottles. The Universal Glass Products Co. can produce milk bottles. Mr. OLIPHANT. All kinds of milk bottles? Mr. SMITH. Yes; all kinds; quarts and pints and creamers and specialties. Hamilton can produce milk bottles; Liberty Glass; Lamb Glass Co. can produce milk bottles. Of course, the Owens-Illinois Co. can produce milk bottles; Hazel-Atlas Glass Co. can produce milk bottles. Florida Glass Co. can produce milk bottles. Buck Glass Co. can produce milk bottles. Mr. Cox. Now, can you tell me this, Mr. Smith: Of those companies you have named, how many can produce as many milk bottles in a year as they want to produce? Mr. SMITH. The Owens can; Thatcher can; Olean could, and Liberty Glass Co. could. I think that is all. Mr. Cox. So that, counting Olean as a subsidiary of Thatcher, there are only three companies in the United States today who have a right, under their licenses from you, to produce as many as they like? Mr. SMITH. Correct. Mr. Cox. The Thatcher Co. has a plant in Elmira, N. Y.? Mr. Cox. The Liberty Glass Co. has a plant in Oklahoma, doesn't it? Do you know what plants of the Owens-Illinois Co. produce milk bottles with your machinery? Mr. SMITH. They have a plant in Columbus and a plant on the coast. I don't know whether they make any glass in the East here. They probably may at their Bridgeton plant. They have the right to make them in any plant they see fit. Mr. Cox. There is no territorial limitation on their right to make milk bottles? Mr. SMITH. There are no territorial limitations on any of the people who make milk bottles. Mr. Cox. You spoke a moment ago of the Pacific coast. Is anyone licensed to produce milk bottles on the Pacific coast besides Owens? Mr. SMITH. Owens and Hazel-Atlas. Mr. Cox. But that is a limited license. Mr. SMITH. No. 1 See "Exhibit No. 113," appendix, p. 762. Mr. Cox. Limited as to quantity? Mr. SMITH. Mr. Safford says it might be called a limited license, and I will accept his definition. Mr. Cox. You said there were only three companies with the absolutely unrestricted right. Mr. SMITH. Hazel-Atlas didn't originally have the right to make milk bottles. They asked consent to make a few on the coast and we gave it to them, but we didn't specify the number nor how the license should run. Mr. Cox. It is a license at will? Mr. SMITH. It can be canceled tomorrow if we see fit. Mr. Cox. And they do make a few milk bottles. Mr. SMITH. So I understand. Mr. Cox. Now consider the fruit jars for a moment. Will you tell us how many licensees shown on the chart have the right to produce fruit jars? Mr. SMITH. Three; Hazel-Atlas Glass Co., Owens-Illinois Glass Co., and Ball Bros. Mr. Cox. Are any of those licensees restricted as to the number of fruit jars they can produce? Mr. SMITH. No. Mr. Cox. Those are all unrestricted licenses? Mr. SMITH. Yes. Mr. Cox. Without naming them, can you indicate generally how many of the licensees are licensed to produce packers' ware? Mr. SMITH. I would say a great many, something like 34. Perhaps the committee will be interested in getting to the bottom of this licensing policy. Mr. Cox. I am going presently to ask some questions, Mr. Smith, that may assist you in that regard; if you don't mind, you might wait until then. I think it might be helpful if at this point we put in the record one or two of these license agreements. I have one here for the Florida Glass Co., a certified copy which was taken from your files. You are satisfied, I assume, that that is a copy. (The license agreement referred to was marked "Exhibit No. 118" and is on file with the committee.) Mr. Cox. This license contract contains a provision which is, I think, perhaps indicative of some of the provisions which limit quantity. It contains a provision that the licensee may manufacture milk and cream bottles, "provided, however, that the licensee shall not produce in any calendar year on any and all feeders licensed to it by licensor more than 21,000 gross of such bottles." Mr. SAFFORD. That has been amended, Mr. Cox. The amendment is in your license. That was raised at their request. Mr. Cox. Can you tell me what the number is now? Mr. SAFFORD. It is 27,500. Mr. SMITH. That is due for some explanation, if I may make it. Mr. Cox. I am perfectly willing to let you make any explanation you want to make. Is what you wish to speak about the provision. contained in some of those with respect to increase in total production? If so, you go ahead and tell about that. 124491-39-pt. 2—11 |