October 25, 1921 



HARDWOOD RECORD 



23 



Hardwood Counsel Makes Strong Appeal 



{Continued from jintjr 20) 



that is a strange doftrino," dryly remarked Justice Holmes, liaving 

 in mind the fact tliat if the low price mill controlled the market, 

 mills having high costs would be prevented from producing and as 

 a consequence lumber output would be seriously curtailed and the 

 demands of the market would not be met. 



Frankly ignoring the logic involved in the statement, Mr. Fowler 

 argued that the small millman back in the woods was not doing 

 business in ignorance for lack of reports such as furnished through 

 the Open Competition Plan. But during a vigorous criticism of 

 the distribution of such information, one of the learned members 

 of the Supreme bench interrupted to repeat almost word for word 

 part of the argument presented by counsel for the hardwood men 

 to show the impossibility of a man conducting his business intelli- 

 gently without market information. Mr. Fowler answered this 

 quotation by citing an instance where a member of the plan was 

 about to sell a bill of lumber when he received the latest sales 

 report, which showed him that the market was $2 above the price 

 he had intended asking. The buyer was at the mill and acting 

 on the information just received the producer raised his price $2 

 a thousand feet. The Justice asked whether the buyer had met the 

 raise and received an affirmative reply. But all this apparently 

 failed to imbue the court with an idea of the lumbermen's perfidy. 



Justice Brandeis arrested Mr. Fowler in the midst of a swift 

 flight of denunciation to ask: "What is there in the law to prevent 

 a group of men from furnishing each other information f " 



To this Mr. Fowler was able to give only an evasive answer. 



Justice Brandeis wanted Mr. Fowler to point out exactly where 

 and how the antitrust law was violated by the appellants. The 

 Justice pressed this question, but was unable, apparently, to secure 

 an answer that satisfied him. 



How Did Eddy Get In? 



When on the second day of the hearing Mr. Fowler began to talk 

 about the Eddy plan of "New Competition," he was interrupted 

 by Justice McKenna, who desired to be informed how this gentle- 

 man came into the case. Chief Justice Taft then asked if Mr. 

 Eddy's book was in the record. Mr. Fowler admitted that it was 

 not, but asserted that the action of the defendants ran parallel to 

 the advice set down by Mr. Eddy. Justice Van Devanter suggested 

 that it would be a more proper procedure for the learned counsel of 

 the Government to confine himself to statements as to what the 

 defendants did. After some discussion, however, Mr. Fowler was 

 permitted to read from Eddy's book, "The New Competition,'' and 

 he elected to quote that portion in which the author alleges that 

 the Sherman act is destructive of co-operation and urges that 

 business men get together and co-operate under his plan. The 

 counsel contended that the correspondence of the manager of 

 statistics evidenced an indorsement of Mr. Eddy's views. 



The Chief Justice wanted to know if it was right to infer that 

 Mr. Fowler interpreted the anti-trust statute to mean that business 

 should be conducted without enlightenment and that co-operation is 

 illegal, though that co-operation may be merely for the purpose of 

 exchanging information, leaving the recipients of the information 

 to form their own conclusions, even though the action resulting 

 from these conclusions might cause an increase in price? 



"It all depends on the degree," Mr. Fowler answered. 



"Doesn't it depend," Mr. Taft rejoined, "on the fact whether 

 there was any agreement to restrain commerce?" 



Mr. Fowler contended that the result attained indicated such an 

 agreement. He denied the exact analogy between the practice of 

 the defendants in distributing statistics, such as they did, and the 

 Government's distribution of crop reports. The latter, he said, are 

 distributed broadcast to the public, while the former are confined 

 to the comparatively few p.-irticipating in the plan. He refused to 

 see any importance in the fact that the lumbermen 's reports were 



filed with the Federal Trade Commission, the Department of Justice 

 and the Forest Service, contending that they were most effectively 

 buried when sent to these institutions. 



Government counsel contended that there were three elements 

 pointing to the reprehensibility of the plan, viz., the natural desire 

 of every man to make as much money as possible out of his business; 

 the element of honor, impelling each participant in the plan to stand 

 by his associates, and the element of shame that would accrue to 

 the individual who should deviate from the alleged tacit i)urposes 

 of the alleged conspiracy. The latter two, he maintained, were the 

 essence of the plan. 



While he admitted that there was no formal agreement among the 

 members at any time to sell any variety of lumber at any agreed 

 price, he contended that the participants arrived at the same results 

 as if an actual agreement had been made, because none dared to 

 brave the finger of scorn that would have been directed at him 

 had he deviated from his tacitly understood obligations to his asso- 

 ciates. 



Solicitor General Closes Case 



The Government's case was closed by James N. Beck, U. S. 

 Solicitor General, who revealed a, forceful declamatory style of 

 address, but seemed to make no uniquely strong impression upon 

 the court, either by the style or matter of his address. He painted 

 a picture showing trade associations very much as ogres and 

 dragons, consuming the substance of the helpless populace, and 

 declared it the intention of the Government to break up all the 

 many open price associations, which he said are oppressing the 

 consumer by inflating prices far beyond his means to pay. The 

 lumbermen were described as a vicious 'lot of profiteers, who in 

 the great emergency of housing shortage, fiendishly conspired to 

 curtail production and sent prices sk3-rocketiug to keep the people 

 from building the homes they needed. He insisted that the lumber- 

 men should not be judged by the details of their methods, but by 

 the results attained. He denounced them through the Scriptures, 

 quoting: "Ye shall know them by their fruits. Do men gather 

 grapes from thorns or figs from thistles?" 



He condemned the members of the plan for the lack of appearance 

 in the record of any evidence of a single suggestion that production 

 should be increased to the level of demand in order to alleviate the 

 shortage of materials. 



With a view to emphasizing the perfidy of the remaining de- 

 fendants he cited the efforts of Wm. M. Bitter of the W. M. Ritter 

 Lumber Company-, to lower prices, referring to Mr. Bitter as "the 

 one righteous man in the industry" and "the one man in the 

 industry who had sagacity and a little saving sense of patriotism." 



He credited the Government with having stopped this alleged 

 gouging, saying that before the Government "stopped this robbery 

 of the public" prices were mounting steadily higher and higher, 

 aided by the artificial restriction of output. 



Justice Brandeis wanted to know what he meant by "artificial 

 limitation of production?" and he replied by citing the Gadd 

 m.-irket letters. 



The Justice then asked: "Weren't these letters warning against 

 overproduction? Wasn't it a fact that there was a big overproduc- 

 tion in other commodities? Is there in the record any evidence of a 

 single concern limiting its production? Isn't it a fact that if they 

 had run their mills night and day, the lumber thus produced would 

 not have been marketable for several months, and should not they, 

 as wise business men, try to look ahead and avoid an overproduc- 

 tion, wliich would injure the industry? What is there illegal in men 

 warning each other not to ruin the industry by overproduction?" 



Very plainly annoyed by these pointed questions, Mr. Beck had 

 to admit that in themselves the warnings were not essentially illegal. 

 But he again insisted that it is the essence of this case that "you 

 (Contitiued on page 30) 



