United States v. United Shoe Machinery Corporation, District Ct. of the U.S., District of Mass.

This collection contains the transcripts and records of the 1949-1952 Sherman Act antitrust proceedings against the United Shoe Machinery Corporation in Massachusetts' federal court.

United Shoe Machinery was created in 1899 by a merger of Goodyear Machinery Company,Consolidated Hand Lasting Machine Company, and McKay Shoe Machinery Company. It quickly became an international corporation and achieved nearly complete market domination in the United States.

United Shoe made its fortune largely on its practice of leasing rather than selling its shoemaking equipment to its customers. Of this innovative approach, FORTUNE magazine wrote approvingly in 1933, "if you can save a man $10 and charge him $2 for the service, it does him no harm if you made a good profit on the $2." Its massive factory complex in Beverly, Massachusetts made the city the richest in the state, and in 1930 United Shoe built Boston's first skyscraper (at 160 Federal Street) for its corporate headquarters. The corporation flourished throughout the Great Depression and the Second World War.

On December 15, 1947 the United States filed a complaint against United Shoe Machinery Corporation in federal court in Massachusetts, alleging violations of the Sherman Act, 15 U.S.C. § 1 et seq., and charging that United Shoe had been illegally monopolizing the shoe manufacturing industry since 1912.

In his 60-page opinion, Judge Charles E. Wyzanski described the ensuing trial: "A trial of prodigious length followed. The court attempted to shorten the hearings by requiring defendant in advance of trial to submit to the Government's exhaustive requests for discovery, by requiring the Government at the opening of its case to file a brief correlating all its proposed evidence, by encouraging the use of sampling devices, and by insisting that the Government should, in formal answers, indicate in each branch of the case on what evidence it principally relied. Nonetheless, the hearing took 121 days and covered 14,194 pages of transcript and included the offer of 5512 exhibits totalling 26,474 pages (in addition to approximately 150,000 pages of OMR's and over 6,000 soft copies of patents) and 47 depositions covering 2122 pages. At the close of the evidence the Court asked for briefs, and requested findings of fact and conclusions of law. The Government offered briefs totalling 653 pages, and requests totalling 667 pages. United submitted briefs totalling 1240 pages, and requests totalling 499 pages." United States v. United Shoe Machinery Corp., 110 F.Supp. 295, 298-99 (D.Mass. 1953).

The court finally found that United Shoe had violated the Sherman Act, and it prescribed several different remedies but stopped short of dissolving or fracturing the corporation. On appeal, the U.S. Supreme Court affirmed. United Shoe Machinery Corp. v. United States, 347 U.S. 521 (1954).

The case went back to court in 1967. The government petitioned for an order to dissolve the corporation; the corporation petitioned for a less strenuous remedy than the one previously ordered. The district court, under then Chief Judge Wyzanski, ruled that the original order would not be modified since nothing had changed significantly since then. United States v. United Shoe Machinery Corp., 266 F.Supp. 328 (D.Mass. 1967). The Supreme Court reversed, ordering the district court to supply a remedy that would effectively terminate the illegal monopoly, deny the corporation the fruits of its statutory violation, and ensure that this could not happen again. United States v. United Shoe Machinery Corp., 391 U.S. 244 (1968).

After the first wave of antitrust litigation, United Shoe continued to innovate within the shoe manufacturing industry, but it also developed such modern inventions as the hot glue gun, the soda can pop-top, the drive mechanism for the lunar module, and pop rivets for the Concorde. The company's name was changed to USM Corporation in 1968 to reflect its increasing diversification, but the company went deeply into debt financing its new acquisitions, and its stock value plummeted. In 1976 the company was bought by Emhart Corporation (now Emhart Teknologies, a wholly owned subsidiary of Black & Decker).