Upset in Milwaukee

"I have no interest in trust-busting for the sheer joy of it," remarked Robert Jackson, Assistant U. S. Attorney General in charge of trustbusting, in a published interview last week. One thing was sure: Lawyer Jackson last week had something less than sheer joy in his latest attempt at trustbusting. For nine months early this year Lawyer Jackson's department investigated the operations of the four big auto-financing companies owned by or connected with automobile manufacturers. Last September it began presenting its evidence to a special Federal grand jury in Milwaukee. Last week, just when it seemed certain that the grand jury would crack down on the companies, the Government's efforts came a cropper.

According to such groups as the American Finance Conference and the National Automobile Dealers Association, extensive monopolistic coercion is practiced by General Motors Acceptance Corp., Commercial Credit Co. (which finances instalment sales for Chrysler), Commercial Investment Trust (for Nash, Hudson, Auburn, Studebaker) and C.I.T.'s subsidiary, Universal Credit Corp. (for Ford). Last year these four handled 75% of all new car financing (TIME, Nov. 22). According to the Department of Justice, their monopolistic methods cost the public $60,000,000. Having listened to evidence from 263 witnesses in Milwaukee, a Federal grand jury last week was ready to announce its findings when crusty Federal Judge Ferdinand A. Geiger suddenly post-poned them. Judge Geiger in his 25 years on the bench has become known as one judge who will tolerate no legal shenanigans. Last week he had just got wind of considerable shenanigans.

To his court he summoned attorneys for the finance companies and the Government, demanded to know the details of certain conferences with Assistant Attorney General Jackson which had been held off the record in Washington. H. M. Hogan, assistant general counsel for General Motors, declared that he and officials of the other indicted companies had been called to Washington to "talk over" a "consent decree" whereby the manufacturers would divorce themselves from their affiliated finance companies.

Said Mr. Hogan: "It was my understanding from what Mr. Jackson said that if all the parties concerned signed the consent decree there would be no indictments by the Milwaukee grand jury." Lawyer Hogan quoted Lawyer Jackson as saying that the jury would be told: "We have accomplished all we wanted you jurors to accomplish and we recommend that you drop your proceedings." Concluded Lawyer Hogan: "Jackson said further that there could be no decree unless all were willing to sign. I was unwilling to sign."

Lawyer Russell Hardy for the Department of Justice then tried to show that the idea of the conferences originated with the finance companies. Said he: "If you could get the discharge of this jury, that would be a happy solution for your company, would it not?"

"That is immaterial," retorted Lawyer Hogan. "If we have violated the law, we ought to be indicted. . . ."

That the finance companies were not entirely innocent of shenanigans appeared, however, with the revelation that they had hired a onetime newshawk named Harry G. Croy to investigate the personnel of the grand jury. Judge Geiger promptly cited him for contempt of court.

Finally, after a day of questioning, hard-boiled Judge Geiger ruled: "It is my judgment that the Department of Justice did not have the power to negotiate with these parties for a consent decree during the pendency of the grand jury inquiry and that it was not proper for the parties to get together to deal on matters that were within the terms of probable indictments. For these reasons, there is nothing for me to do but discharge the grand jury. . . ."

Trust-Buster Jackson will now presumably start over again with another grand jury in another Federal district. Meanwhile last week his boss, Attorney General Homer S. Cummings, took the matter seriously enough to send a protest to the House Judiciary Committee. Terming the case "not an isolated instance of arbitrary, unjust and unfair conduct on the part of Judge Geiger." Mr. Cummings declared, "this course of conduct is so obstructive to the administration of justice that I could not justify a failure to bring it to your attention."

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