714 ANNUAL REPORTS OF DEPx^TMENT OF AGRICULTURE. 



COLLECTION AND DISTRIBUTION OF EXCESS PROFITS ON WOOL CLIP 



OF 1918. 



, 1 'r 

 In the spring of 1918, the need of the armed forces for woolen 



clothing and other equipment, together with a world-wide shortage 



of wool, made necessary the taking over of the entire domestic clip 



of that jesLT and the regulation by the War Industries Board of the 



handling of the wool by dealere. The regulations requu'ed all dealers 



to be licensed by the board and provided that any profits made in 



excess of those permitted by the regulations should be disposed of as 



the Government might decide. 



Upon the dissolution of the War Industries Board on December 31, 

 1918, the President devolved upon the Bureau of Markets of this 

 department the duties of the board respecting the controlled clip. 

 Thereafter, Congress directed that such excess profits should be dis- 

 posed of by being paid over to the department and distributed by 

 the department to the growers of the wool. The principal duties 

 of the department in this regard have been, therefore, the ascer- 

 tainment of the excess profits made by the respective dealers, the 

 collection of such profits, and the distribution of them among the 

 growers. 



In an early period of the work, certain de£ilers developed a deter- 

 mined resistance to the collection by the department of the excess 

 profits, and that spirit spread un*;il more ihv.n 50 dealers were in- 

 volved, most of whom have acted apparently more or less in concert. 

 The attitude of these dealers necessitated the institution of civil 

 actions to recover the excess profits found to have been made by 

 them. Forty such cases have been reported to the Department of 

 Justice and 29 are now pending in 19 Federal judicial districts, the 

 others having been disposed of by judgment and collection or volun- 

 tary payment, or, in cases where the defendants were so insolvent as 

 to render collection by legal process impossible, by compromise. 

 Preliminary to the institution of suits, this office prepared a very 

 exhaustive memorandum on the legal authority of the War Indus- 

 tries Board to prescribe and enforce the regulations and furnished 

 this to the Department of Justice and the various United States 

 attorneys to whom cases were refeired. 



The first phase of the dealers ' opposition took the form of demurrers 

 questioning the legal existence of the War Industries Board and its 

 authority to control the clip or make regulations in regard thereto, 

 and also the general authority of the United States to maintain the 

 actions. Cases involving those questions have been heard and 

 decided in favor of the Government in seven districts. Three of the 

 cases have been reported — United States v. Powers (274 Fed. 131), 

 United States v. Smith (285 Fed. 751), and United States v. Gordin 

 (287 Fed. 565). In two of the cases this office participated in the 

 oral arguments in the courts. Two others were argued for the 

 Government by the office in cooperation with. United States attor- 

 neys. In the remaining three, the office prepared the exhaustive 

 briefs which were filed. There were no unfavorable decisions during 

 the year. In one of the cases, a writ of error to the Circuit Court of 

 Appeals is now pending. 



Four cases have come to trial upon the merits. In two the facts 

 were stipulated and judgments entered in favor of the Government. 



